We currently own one single family dwelling renting for 1.79% of the purchase price and another that was going to be used as a rental but after digging into some unforeseen repairs, we are looking at flipping and using the money to either purchase a new rental or pay off the first home outright and be free and clear. 

For example buying an older Bungalow with minimal improvements and adding  a secondary dwelling.

You can background check all you want, but once you add the human element, there are so many variables.  

I had a late 20's tenant with $200k in student loans for a freaking humanities degree! 

Also you probably want to work with an architect who has ADU experience I can recommend one if you want.Here is a recent article with more information: http://www.sfexaminer.com/city-easing-onerous-approval-process-accessory-dwelling-units/

@Alicia Gates(SFRs). [24 CFR §110.10(b)](b) This part shall not require posting and maintaining a fair housing poster:(1) On vacant land, or(2) At any single-family dwelling, unless such dwelling(i) Is being offered for sale or rental in conjunction with the sale or rental of other dwellings in which circumstances a fair housing poster shall be posted and maintained as specified in paragraph (a)(2)(ii) of this section, or(ii) Is being offered for sale or rental through a real estate broker, agent, salesman, or person in the business of selling or renting dwellings in which circumstances a fair housing poster shall be posted and maintained as specified in paragraph (a)(1) of this section,

One recorded eviction on their state record and they'll never rent a dwelling again significantly better than a cardboard box.That being said, there's ALWAYS A risk in these cases.

In 2014 we bought our first house, although my husband made around 130k a opted for a 'good deal' because of who I am as a human.

The subject must be a single family dwelling.

A landlord must follow the requirements of the Eviction Law and cannot refuse to renew a lease without good cause (See Causes for Eviction), except in the case of owner-occupied two and three family dwellings, transient or seasonal tenants."