If you follow those recommendations and execute your plan for the property, your concerns over "red tape" for a rehab will be a small obstacle when you realize you have acquired an income producing asset that you can own indefinitely.  

Their a much cheaper option for my area( Southern California), are there any red flags I should look out for when house hacking mobile homes?

Huge red flag. 

Any other red flags I might be missing?

The one red flag I noticed is your ARV.

NC GS 42 may not make the top ten on the NY Times Bestseller list, or be a top player on GoodReads, but it's worth a gander in our business.

For example, here in my city of Eugene, it is a red hot sellers' market. 

Hey @Mitchell Palmer, I’m regards to the siding, many investors here in Ohio don’t replace it or cover it if it isn’t necessary.As an insurance agency owner, asbestos siding isn’t a red flag and doesn’t have any surcharge associated with it.From a durability stand point, I think it lasts longer and is more durable than vinyl siding.From my understanding, asbestos is only dangerous if disturbed.All of that to say, I wouldn’t be in any rush to spend any money on it.

Can you ask your usual players if they might want to consider meeting up with me? 

@Tyrone Osilesi - as @Chris Mason states, Fannie and Freddie are not the only players in town.