I'm concerned that there'll be way more government regulations that'll come forth as a result of this.

That is violet has of IRS regulations.

The HOA does allow me to take on tenants, so all good on that end.But now I'm trying to dig up info on LA County's requirements/regulations, and was hoping this sub-forum could shed some light on what it takes to do things by the book here. 

BUT, I’ve always had the underlying opinion that owning real estate means you are participating in a regulated industry.

Hard money lenders who an invest on non-owner occupant properties have few regulations, as soon as its an owner occupant property they are allowed to do a few a year before needing to become a fully licensed lender.

The state of Connecticut has zero regulation when it comes to who can become a licensed GC.

If you are raising money from passive investors and promising a return for their investment, this is considered offering a security and is regulated by the SEC.  

When directors or shareholders or regulators demand a decrease in risk, exposure to investment properties are a logical place to start.... which is another reason I doubled down on mortgaging everything I can (meaning, not HELOCs - actual mortgages) and building a bond arbitrage portfolio so money that I'm not using is earning about the same amount at the mortgage interest is costing me. 

There are way more rules and regulations of having a building and renting out per room.

If you’re curious, look up adverse possession regulations in your state so you’ll know what kind of situation your neighbor is in.