From the details you provided it like you are on a net lease, which is common in the commercial space. 

They also require the subscription be in a business entity registered with the state (LLC/DBA/Etc) and may reject a home office space. 

@Alex Levich Considering the pool was likely a place that residents hung out when the weather was nice, why not consider making this another space for residents to congregate. 

There is a ton of yard space on this lot and we took the trees down so we'll be relandscaping around the property here and there.

@Parker Eberhard I've heard of this concept, isn't Travis Kalanick staking out his next startup in this space?

They rely on people not having the space to store the things they rent and wanting to save a few dollars.

It's probably going to make a lot of places worth less vs worth more (Homes in Dangerous Detroit can be had for $200, Homes in much safer areas cost much, much more--there is a reason for that).People need a place to live indoors--but this is NOT the solution.Los Angeles has the enormous Nickerson Gardens housing complex (public housing) for this sort of population, Oakland should construct the same if they don't already have the same kind of thing.

.): $4kMain property Rehab (if BRRRR): $18-$22kMain property Rehab (if flip): $25-$30kGarage roof: $6kPool house to apartment: $15kARV: $135 - $140kIncome potential:Single family: $1350 /moGarage space: $200-$600 /mo1BR apt: $600 /moIf I flip the property, I wouldn’t convert the pool house and if I BRRRR the property, my plan would be to convert the pool house after I’ve had the main house rented and processed the refi.

1) It is not yet clear but it seems that you will be grandfathered in at the time when the changes occur in regards to occupancy changes.2) Per AB-68:"(A) One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-family dwelling if all of the following apply:(i) The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single-family dwelling or existing space of a single-family dwelling or accessory structure and may include an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure.

What is the size of your retail space?