Bungalos with cottages and small ranches, etc.  

I'm wanting to build a 600/700sf cabin/cottage as a rental.

There are old estates that pop up here and there - multimillion dollar places that have several "guest cottages" on the property.

With down payment assistance programs like WSHFC and 5% or 3.5% down loans though it seems like you're qualified for a larger property on the down payment front, and just have to make sure you're qualified on a income / DTI (debt to income ratio) front.We usually target SFH's with ADU's (usually basement units, but backyard cottages work too) within Seattle City Proper. 

@Drew Corwin are you thinking about an attached (usually basement) ADU, or a detached backyard cottage (DADU?)

The most effective way to do this would be a basement unit, as they tend to cost much less than backyard cottages ($50,000 - $150,000 is a good estimate for a basement unit build, or way less if you throw in sweat equity or cut corners, while a 700+ sq ft backyard cottage will usually cost you $200,000+)Right now I like Kent/Des Moines (because of the upcoming lightrail stop), Renton & Everett (low prices, good multifamily opportunity), Tacoma (wonderful place to live, few good jobs, but may be revitalized further by upcoming light rail stops and more companies switching to Work From Home), and the Beacon Hill and Hillman City neighborhoods of Seattle. 

Speaking of Buffett - he's been sitting on piles of cash for 12 years before making a couple of purchases in the last few years.To be a bit more action biased I'd look at Alberta where prices are still low-ish; at houses without any condo fees where you could carve out 3 units to rent instead of just one; perhaps STR-MTR in cottage country where you could negotiate a good deal.