I had my first vacancy in December and used that time to renovate the property by replacing all the flooring, converting the den to a 3rd bedroom, and some other cosmetic and minor structural repairs.

This double structure with master lease is important to convert the str income to passive income.

California rent control doesn’t apply to single family houses.. is a single family with a converted garage to 1bedroom considered a Single family (is it exempt?)

I'm concerned about a couple cracks in the 6" concrete slab foundation in the garage I'm now converting into an ADU. 

I agree with converting them to fixed-rate loans, maybe 15-year terms.

Our insurer will convert our builder's risk policy to a landlord policy once the rehab is done.   

What would happen if it's converted to a five-plex?

I could definitely do that, but since I've recently gotten the real estate bug, I was just considering converting it to a rental, as another option. 

The true value of you money outside of the house is equal to at least 5 times what it is inside that house...and this is any house...your own home or a rental.Once you commit to your house being converted into a rental, you must forget it was ever your house (I didn't way that part would be easy), and start treating it for what it is now...a rental.

Front end : Less Revenue thus less tax payment , Back end: Stronger Balance sheet by converting debt into equity.