It can be done for new build but not rehab since all rehabs are different. 

It sounds like you are in a really good spot right now and have a lot of options, I hope some of this info helps, or gives you a different perspective perhaps, I wish you all the best! 

From a legal standpoint, sure, it's not much different other than the paperwork and govt red tape.

They're basically two different skill sets and it's fallacious thinking to assume you can do one because you can do the other.

Your realtor should be the first source of guidance.For anyone here to provide you some guidance, you have to be more specific on the ask.There are always many things to consider when planning for different strategies.

I bet if it were your grandmother or relative in that situation you would think differently.

But it is a different ball game compared to GFC and pre GFC when lenders and service rs did not offer workouts like they do now..

Other loans might be a little bit different.

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.

It's interesting to hear the different opinions and outlooks and how they differ from one lender to another.