Thanks Don, that is both enlightening, and created new questions as I have 2 potential deals that could be classified as commercial, both are airbnb portfolios, with one being 3 singe family units, and the other being a single site with multiple units (11 units,themed resort style).

Here is a list of what adding ADUs, especially in single family zoned areas,  in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

He has only done single family (non investment) properties.

It seems like your ROI is basically the same in each option, but you are taking on a much bigger project to convert a single family to a four-family.So basic calculations, since we don't have a full financial picture, i.e. what does financing of each look like?  

Some even bet against the market and made a fortune.

You can only offset W-2 income with $610K in 2024.For single filers, the limit is $305K.2.

We are paying 5k rent for a 4 bedroom single family house.

Another thing to consider, most single family bedrooms rent for 800-1200 monthly depending on the area.

Long-term rentals in single-family homes might not yield as high a return as short-term options, but they offer stability and lower management intensity.

Your best bet is to consult with a good broker that has experience with business insurance and RE.