Also, based on the new regulations (1 of the 2 units must be owner-occupied), how do you think this will impact the home's value?

Depends on the market but if you are trying to market to vacationers or move upscale, then I think you need to offer a pool.

Taking out $500K of tax free money (sounds like Section 121 (married)) through the sale of the property is great if you're trying to scale your portfolio.

Unpermited units can cause a major headache down the line if you try to refinance or sell.Best of luck to you!

Zoning must be residential, recreational, forest, or agricultural (remove the commercial, exempt, government, etc.)5.)

Of the services mentioned above, I have only tried Zbuyer.

Signing an Affidavit feels like were just trying to scare them into paying and that really there's no recourse. 

You will hire 2-3 of the wrong contractors also and lose 10-15k in walkway money.Your first try should be to do a flip as a smaller partner with someone else, a friend, a local investor from a meetup, so you can learn the ropes, know how to manage a crew, etc.

@Loretta Chang - Our goal is cash-pay clients but I have seen other people who try to start this type of assisted living home try to just focus on getting only these types of clients since you will get a higher return from them.

If you're going to go through with this, research carefully (WaterPik, for example, makes some good ones, but they're expensive), and try a few models out for yourself at home.