You are in California and that means your state laws may be more restrictive so you might need to talk to a lawyer.

Sometimes it is necessary because of lot limitations or some other bs restrictions.

Contact your local city permit office and find out... also make sure the lot isn't part of any HOA or has any neighborhood restrictions. 

Yep, just list all of your rules in the description, such as age restrictions, pets or no pets, etc. and whatever other rules you want-after all, you own the house, you’re allowed to set the rules!

If possible try to stay out of the city of LA, Santa Monica, Venice since they have the most restrictive form of rent control.

. - also, make sure they are all paid Security Deposits - verify the correct amounts and get an idea of the work that was recently done on the property HOA Documents - if it's governed by an HOA, you need to review the declaration of covenants, conditions, and restrictions or the CC&RsVerify everything else not includedPhysical InspectionHow to find an inspector?

These buyers need to "juice" the potential rent by obtaining additional revenue through utilization of a purchase option, marketing the property to buyers unable to qualify for a mortgage but having and willing to pay extra each month above market rent to lock in a purchase price or believe that they are "building equity".The SAFE Act and the CFPB have placed some restrictions on these lease option agreements, so a much more careful following of agency regulations has to be observed by real estate investors doing these transactions.  

I stay away from areas that are restrictive like Historic Districts and overly zealous HOAs.

Since these are highly localized and very state specific I can't speak about each one but sometimes they do have restrictions on buying a 2nd property or a multi-family property.  

Thanks for the replies, and I'm looking forward to getting to know the BP community.The VA, like FHA and other programs do have many restrictions.