@Jeremy A.Install these in your units,  they should automatically suppress stove fires, where it's most likely to happen, so your tenant can legally booze it up in peace! 

Every bank is different and have different appetites rates and terms so you need to package the deal up and your financials and shot them all.If you have trouble getting a bank to do the deal then you need to create a non-secured note with the owner or convert them into an equity position as an LP investor.

NYC also seems like an unforgiving market which might be too risky for my appetite. 

It’s definitely small, and I’d never live in one but there is an appetite for it

That is, what is my appetite for cash flow vs appreciation.

That is, what is your appetite for cash flow vs appreciation.

But even in other passive routes, there are traps/pitfalls to look out for.Regardless, you should start by formulating your own investment criteria (e.g. level of return you are looking, your risk appetite, holding period, your source of funds/cost of capital, are you looking for cashflow or appreciation, or both, do you want to be active v. passive - you sound like a passive to me).

@Desmond Bucky depends on your risk appetite and potential income of ADUs can’t really use it as a contingency.

That will be an adventure in and of itself and will give you a better idea of your appetite for real estate. 

The economic struggles of the city will suppress home values and rents for the foreseeable future.