Additionally, depreciation deductions on the multifamily property could offset a portion of your rental income, further enhancing returns.Key considerations:- Financing the multifamily: Would you go all-cash or use financing?

If you are able to add an additional full bath, it sets you apart in the market big time! 

Then if I have additional concerns I call in an expert to get further information and an estimate on what the repair will cost.

I agree with the others here that say you need to have some skin in the game, if you are going to live there yourself, get an FHA loan rather than owner financing, you can get a 3.5% down loan, personally I do not love these as they require  PMI which is an additional expense, and you also need  bring additional funds for closing at least for taxes, title, attorney and transfer fees . borrowing from anyone else for the down payment, to include a personal loan from the bank is not a good idea, those again will be higher int. rate.

A HELOC or cash-out refinance on your current rental could unlock additional funds if interest rates improve.

I pull permits for removal of load bearing walls, addition of bathrooms or bedrooms, addition of footage.

Not a big fan of LTR furnished units, the additional wear and tear isnt worth it in my market and of course smoke smell can be hard to get out. 

As you alluded to, sometimes a passive note investment purchased for monthly payments “goes south”, and becomes an active participation investment, with plenty of additional capital required for legal fees, forced place insurance, and property taxes.  

In addition, you would need enough working capital to pay for insurance (which will be going up a LOT in Los Angeles) and to pay for property taxes.Don't buy this unless you have substantial resources and a cash cushion to keep yourself safe.

If we waited 12 months and got up to 80% occupancy would have netted an additional $500,000.