No matter who you call, they will always tell you they know how to handle real estate because no good business person is going to turn down a customer, but that's where it becomes frustrating. 

I found this little nugget of info in the instructions for Schedule C (Line 1):Installment sales.Generally, the installment method cannot be used to report income from the sale of (a) personal property regularly sold under the installment method, or (b) real property held for resale to customers.

What we did on one of these was to do the project after we learned that they were already utilizing the bedroom as a bedroom anyways (against the rules) - we didn't increase rent right away but gave them a year at current rent, and gave them visibility into what we thought market rent was going to be after some time and the option to stay at the increase... 

I think it can be seen as your tenants are your customers and having a good working relationship with them is probably going to be best overall.

Funny thing is in these cases, the public utility is the first to notice and often come by to take a look at the meter thinking something is wrong with their equipment.

Vacancy, legal, accounting, advertising, screening, property management, utilities when vacant, routine maintenance, turn over costs, cap expenses, insurance, etc.

Also before buying a property - capex, utilities, property management and all other related expenses should be calculated before purchasing an investment property - especially in california.

You could maybe cut your cabinetry expense in half (or more) by using Ikea boxes and custom fronts from someplace like SemiHandmade, and work with a GC that has worked with Ikea to make it look custom.

We find wholesalers through Craigslist, Bigger Pockets, and meetups (I suggest utilizing meetup.com).

If you are running into such high number due yo wanted to have self contained units, maybe you should look into billing back your tenants for utilities.