In one case it was severely scratched when the oven was installed, and though the scratch is noticeable, it blends in and is the same color, so we decided to not even replace that board.

Sure, sounds great.

It sounds really absurd but true.I have heard about the title insurance endrosment but not sure why they could not get an affidavit from us declaring we will not declare this property as homestead in the future. 

Definitely have an exit plan to replace the funds from the HELOC - sounds like yours would be to sell the property and pay the bridge off.

Trying to avoid purchasing the park only to then have to replace 40 systems. 2)Any recommendations for DD (not spending $30k to drain and inspect them all). 3)Would our insurance help with replacement?

when was the roof last replaced, bathrooms, kitchen, and floors. 

In California you also have to worry about rent control and not violating the rent-increase caps for your jurisdiction through new utility billings on a preexisting tenancy where utilities were previously included.The cost for third party billers is minimal and they'll help you get your arms around all this if it sounds too complex.

There are a lot of details to all of that, but here is the handbook: https://www.hcd.ca.gov/policy-...California is relatively STR friendly, ESPECIALLY if you live in the unit as your primary residence...which sounds like a great possibility for the OP.Look around for a house that has a detached garage, basement apartment, etc. 

Sounds like government logic to me 🙄.  

This sounds like a non permissible expense and it needs to be amended.