Loans on IRA's are not permitted. 

This would be considered a lender overlay and lender overlays are permitted. 

-- Sorry but it doesn't make sense to me.... dealing with Cities for building permits, sourcing material and dealing with subcontractors is a much much much more complicated then buying a house or a small multifamily to renovate and rent.

If I was offered an off-market listing in say Napa county which has limited permits available I think I would probably be competitive with my offer still. 

The city is getting tough on permits also.

And I have suffered the economic injury of my renovation being slowed by at least a month, due to the city closing its city building and permitting offices, and the injury of losing the opportunity to flip this property at a small profit.

If the property has non permitted work it will be near impossible to secure a loan for a buyer to purchase the property.

Any type of commercial loan where you are permitted to keep a property in a JV or LLC name is just out.  

That being said, people create apartments out of basements all the time, most of the time without permits or approval. 

The county code compliance agent completed an inspection (without me there), and has questions about some construction that's obviously been done without permits since the original building (but not done by me).