Housing Hacking In Los Angeles - Multi-Family or ADU Living?

[James Bianco]

Hey BP,

I live in Los Angeles and am looking to house-hack.  My goal is to live mortgage-free or as close to it as possible so that I can save money and buy properties out of state.  I'm torn between the following two options and would love any input on which one would be better from a long-term investment standpoint:

1) Buy a dup/tri/quadplex, hopefully with at least one unit delivered vacant to live-in and rent out.  Obviously RSO/rent control is difficult to avoid in L.A. and the numbers would have to make sense.

2) Find a 3bd 2bth with a detached garage (or ideally permitted guest house) that I can convert to an ADU and live in, while renting out the house. I've done the research and am aware of the rules and costs to make this work. Ideally, I would find a property with a guest house that already has the utilities connected, and just needs a kitchenette added.

My instinct is that option two might be a better investment over the long-term assuming that SFHs appreciate more than multi-family and sell easier?  Does that seem right, or no?  

Any thoughts or advice would be much appreciated, thanks.