There are many reasons that adding a single ADU in southern CA is a less than ideal RE investment (i will post a list at the end) but the negative initial equity is a primary reason as the initial negative equity position consumes the initial cash flow and can take many years to recover.As for converting your home to a rental….

Ideally the owner would handle everything and would have no need for a property management company with only this single duplex in their portfolio. 

A 4-plex would be ideal and you could play around with doing 1 long-term, 1 mid-term, and 1 short-term, plus you, if it works on your area to upgrade your income.

Yes, looking for another property now, ideally one where I don't have to live in a closet

This property would be for my in-laws to purchase and move into, but I'd ideally dovetail any success into finding investment properties as well.So far, I've driven around the neighborhoods my in-laws would ideally purchase and jotted down the addresses of the homes that clearly need some TLC.

Some carriers require limited water damage coverage depending on the age of the property and age of utilities.I would recommend at least 25% (ideally more) when possible and if you're limited to 10% you should make sure you cannot purchase another policy for a similar price.

Zillow is not ideal because this is a monthly furnished rental - which Zillow doesn't have a specific platform for - but that's what has worked for me up to now. 

Ideally, we'd like to acquire one or two duplexes that meet the 1% rule and provide us with $1,000–$2,000 USD per month after property management fees and other expenses.

Over rehab de property and it wasn't the ideally neither

And I find many tenants in this class level really connect with it if there an ideal tenant.