I fully intend to rent out several of the rooms, possibly in a Short Term situation through AirBnB type sites, some rooms to what I hope to be my daughters college friends that have Mom & Dad to foot the bill for them :) Aside from that using a small MultiFamily is a great idea as well as even doing a live in fix and flip, these are all ways to house hack and unless you just can't stomach having "roommates" or living next door to your tenants then I just can't see a downside. 

We ended up selling them this land for ~$13k and it was originally purchased by us for ~$3k (based on what we paid per square foot for the lot).

Since this is a major operational transition for me, I want to get it going on the right foot  and will probably return with more questions :-)Thanks!

A lot of people have issues keeping up with the paperwork side of things, so if you make connections and offer to help get stuff scanned and filed you may be able to get your foot in the door that way. 

Pretty new at this but as I go through listings in Los Angeles, I've started to really pay attention to the price per square foot (and the lot size too).

I know some micro-units are being built now but there aren't many to buy and, on a per square foot basis, they're extremely expensive.

Should we put them under contract and have the seller offer to buy the foot of land being encroached or offer less and offer to purchase the land myself?

Triplex (two structures) with a large foot print. 

Also, I was thinking to get my foot in the door I would start with a 1 family home, within the 80-120k range.

Start off on the right foot, and it will make your marketing campaign and acquisitions process so much easier.