Mostly people with minimal RE experience are adding a single ADU and they often make that choice based on cash flow without taking into account the negative equity position.  

The Justice Department’s acting assistant attorney general, Doha Mekki, put it bluntly: this case is about ending the practice of “putting profits over people.”

If so, can anyone recommend any best practices?

It's hard to harvest equity on these plays, unless you commit, long-term, towards very light leverage, as the only practical ways to benefit from the equity in your portfolio, if you plan to never sell it, only exchange it, for a lifetime, are to spend the cash flow, or cash out refi.

It won't be as promising; the saturation of this thematic investing choice has defeated it's purpose.

This is my practice house because we are building a 4plex (with parking!)

Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice.

Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice.

But I have 0 empathy to pay for someone's CHOICE of not having there stuff insured. 

Beautiful renovation and design choices!