That said, I wonder if these are the kind of cameras that require "altering the property" in any way, because there is typically a provision in lease agreements that prohibits the tenant from altering the property without landlord permission. 

Of course, with all things, the answers to all these matters will depend on the circumstances.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

I have some thoughts to your question:1) Maintenance service plans (requires agreement with preferred vendor, or if you have maintenance staff, through your company)2) Landlord liability insurance through third-party insurance providers (note: this is in addition to a Dwelling Policy, which the owner should already have)3) Lawn maintenance service programs (requires agreement with a vendor for agreed-upon pricing, or if you have lawn staff to provide this service, through your company)4) Fee in lieu of security deposit (requires agreement with insurance company that provides this service)5) Increased inspection options (e.g.

3. requiring heavy amount of rehab (siding, foundation, roof, HVAC, appliances)?

If I secure FHA funding, I would live in the house for the required time, then rent it out.

Not really, as long as you are up front with a lender, most would just require you to show them the establishment of the LLC/accounts and then could proceed with that.

However, that requires us to dig down the basement floor to meet the ceiling height requirement (it's got the egresses and 2 exits already), and I think that can easily cost us $100-120k.

But sometimes free can cost you a bundle if you violate local laws, or don't include something that is required in your state.

This would require incredibly expensive work as we would have to cut through a public street.

Find out their requirements to fund a construction loan and their terms to provide a permanent loan after construction.