The risk is that, if this doesn't occur in time, the market itself will "sort out" the issues on its own and arrive at an equilibrium that is far from what most (or all) stakeholders would prefer.

If you house hack and stop having to pay for most or all of your own housing you will increase the amount you can save for the next place. 

That means if you can pay some or all of it back, pay interest only on the amount that is still withdrawn, and still have access to the entire line of credit until the withdrawal period expires, usually 10 years. 

Accessory dwelling units shall not be allowed where roadways, public utilities and services are inadequate.

I think we probably over improve in our market in CA, but we have been successful at the BRRRR and it is easy to force the equity, which we have to or all of our cash for the down would be stuck.

Is it based off of features (like having a fully functional kitchen and separate entrance), the share of utilities, intent, or all/none of the above?

This occurs when the HOA has inadequate reserves, the HOA fee is too high in relation to the income of the owners, or too high a percentage of owners are not occupying their units.I would definitely insist that the note being held by the seller be assumable, if the above is correct it may be your only way to sell.Additionally you will need to see if the seller owns the property free and clear, or is he wrapping an existing mortgage note within his new seller financed note?

You can use someone else's money, but that person will want interest, fees, equity, or all of the above. 

They may end up being a good team member, friend, and/or ally in the business!

@Liz Ridgway your understanding is correct in that you must sell a material portion (or all) of the real estate activity in order to claim passive losses.