It is a 4 unit home with a decent cap rate (7%) in comparison to where I am looking.

Everyone's waiting for interest rates to fall but not sure if that's going to happen now.

Here is text taken from the HOUSABLE website for Oakland:Utility ConnectionsCategory One: No new or separate utility connection shall be required.Category Two: A new or separate utility connection may be required, but the connection fee or capacity charge shall be proportionate to the burden of ADU on the water or sewer system.Here are definitions of the ADU categories from the City of Oakland website:CATEGORY ONE ADU: Involves either conversion of space within an existing Single-Family Dwelling, or conversion or rebuild of an existing accessory structure; includes no expansion of the existing building envelope other than up to 150 sq. ft. for purposes of accommodating ADU access and egress only.CATEGORY TWO ADU: Involves construction of a new detached or attached structure, including an exterior addition to an existing structure to accommodate the ADU, in conjunction with a proposed or existing Single-Family dwelling.It seems that Oakland is making things confusing with the language they are using, but I still believe that my original interpretation is correct based on the State Assembly Bill. 

Is it feasible to obtain a loan or a good old boy agreement where a lender offers 100% financing for both the purchase price and construction costs at hard money rates, secured by a second position on the borrower's other properties?

I have been offered an exclusive Deal by a local "friend"/ semi-mentor in my small town.  8 standard 2/1 apartments -  Quad, duplex, duplex, 1970 Dated buildings, little neglected but liveableOwner finance: 20yr 6%rate with 20k down------------------------------------------------Total purchase 400KCurrent NOI: 41k     Cap: 10         (Tax,Ins,Maint, Util)Gross rent 4500/mth-----------------------------------------------Upgrade, Est repairs: 60k After reno: NOI: 59K   Gross rent: 6100------------------------------------------------Loan pmt: 2865/mth,    34k/yrCurrent Cash flow: 531/mth,  6,378/yrAfter reno Cash Flow: 2131/mth,  25,578/Yr-------------------------------------------------Added info- -Property line Joins with (growing) Community college-Tiny town-The Buildings are Currently "uglyish".- Current Rent is 150$- $200 behind market avg.I am very comfortable in single family homes in this town (own 18 SFH rented and performing well).

After some time, have a Realtor list it for sale for more than contract to purchase + fees. 11.

My thought process is to purchase the property initially under my name so that we can pay 5% down as my understanding is that mortgages to LLCs are more difficult to find, have higher interest rates, and require a higher down payment (around 25%).

I haven't heard of getting out of PMI and would be cautious what fees would make up for it on the back end.

You could find an attorney or agent - recommend negotiating a flat fee with either of them as pretty standard docs.

So, often times those are paid by the landlord and included in the rent (if they are flat fee) or possibly billed back to the tenant (if they are based on usage).