A land loan for 'raw' land will require a 50% down payment and high APR as you know.

Has anyone dealt with a similar situation and still was able to pass the housing code enforcement inspection (1 / 2 required inspections)?

I recently completed one on a multifamily property and found it to be a cost-effective approach.That said, there are a couple of additional factors to consider beyond the code differences between a garage conversion and new construction:Coastal Overlay Zones – If your property is in a coastal overlay, building a ground-up ADU may require Coastal Commission review, which can add time and complexity to the process.

Updates include a new septic system, wall-hung boiler with radiant heat, and a remodeled kitchen with new appliances and an island.

It requires no money upfront, so you will join thousands of others trying to do the same in your market.

The Sonyma FHA loan, if you refi the loan, move from before the 10 year requirement, etc.

Flat out, I realize we're friends/family, but I need this lease in place to comply with laws that require things in writing and for my protection should there ever be issues.

Coupling all of these (if capable) will grant the most favorable return.I know some buyers will not be comfortable buying a multi unit and some aren't comfortable with buying a home that requires renovation, and some won't qualify for down payment assistance.

I recommend you send notice earlier than required and by multiple avenues to verify receipt.

If cash flow is your priority, out-of-state investing in more affordable markets like the Midwest or Southeast might make sense, though managing from a distance requires a solid local team.If you stay local, networking will be key since the best deals in expensive markets rarely come from the MLS.