As for valuation, I see no reasons why a Junior ADU would negatively impact additional housing unit.

In short, I can afford the additional $1100/mo cost of a second house, even until I rent it out.I have around $35K in HYSA and emergency funds that I could use for a down payment, but that's less than 20% which would be required for a conventional loan, assuming full purchase price.

House hacking is definitely a good move for the San Diego market.

I know that interest rate is WELL below market.

Markets like Texas (San Antonio or Dallas) or North Carolina (Charlotte) could offer better cash flow with lower costs.

No way we can get additional rent to justify this effort.

Considering that, you are likely going to see appreciation year over year, which essentially will be additional equity you'd capture just by simply living in the home. 

Here are some of the more longstanding discussions that may help to answer your questions.Specifically at Rent To Retirement, we operate a turnkey marketplace that focuses about 90% on A class, new construction properties located in growth markets.

In my market, I only have one vendor qualified for appliance warranty work, and the warranty companies paid him half his standard fee for each service call. 

There are several articles that do an exceptional job of explaining who, what, where, why and how tax payers qualify for the ‘STR Loophole’ listed here:The Short Term Rental Tax Loop Hole: A Game Changer for W-2 Wage EarnersThe Short Term Tax Rental Loop Hole: What Investors need to know The implications on the Oregon and California Coastal STR market is a strengthening buyer pool for luxury rentals in the $750-1.5M+ range.