Would easily agree every lender can be different, but underwriting is more strict on commercial loans and my loan was non-recourse personally and w/o personal credit requirements - - which I question the apples :)

If it is coded in a black substance then there is a good possibility you have Chinese drywall.

I had my property manager walk the property with me and the area is very blue collar with lots of families (definitely not blighted) but in this neighborhood, it is obvious that 75 years ago when this was built there were no building codes.

Has anyone here strictly invested for dividend income or any other passive income stream other than real estate?

A realtor offering their opinions to you while you have an agent could walk close to the line of violating the NAR code of ethics.

I'm not familiar with Los Angeles zoning code, but make sure you have city or zoning approval.  

He said banks are very strict on that and they will pass me by if I cannot show the funds in my account within 2 days.

What you read off where the actual codes that where violated, these could be check on the City web Site to get what the exact problem is.

Everything needs to be done safely and correctly according to code regardless of who does the work.

Area code 41048.