Time to take the chips off the table.This never really was a cash flow play.

It sort of goes along with the tiny house craze if you think about it. 

I am not actively licensed in CA, but I use my ability to analyze regulation/laws to help with our current tiny RE portfolio.Our short term goal (2018) is to take the profits from a rental that we currently own in Sacramento (and that we plan to sell in early 2018), to buy a multi-family unit in San Jose or elsewhere in the South Bay (most likely duplex, but looking at tri- and four-plexes).

Get more education and keep stacking your chips for now!

The yard is way to big in the back and we thought a tiny home (less than 400 sq/ft) would be an ideal addtion. 

I kinda ruefully tell them that we see this a lot - inspectors who just don't know what they're looking at, and who are trained to point out every tiny thing, lest they be sued at some point for missing something.I go point by point down their repair request.

Turns out one unit is a very tiny unit with 1 bedroom, bathroom, and a kitchen with no other general or living room space.

As Will said, in most areas, as long as the siding is stable (not chipping, crumbling, or the like) then usually the siding will not have to be replaced.

If you find a tiny bank with their own portfolio, heck, ask the teller.

That is an extremely tiny deal.Most commercial mortgage guys have 10,000 minimums or 1% of loan balance whichever is greater.