Some positives and negatives to evaluate. 

@Dakota Williams While it’s nice to improve the ARV and obtain appreciation for when you sell I’ve discovered that most of the time I can’t access that “hidden value” because to refi out the new value would leave the property with negative cash flow.

Add maintenance/cap ex, vacancy, PM, misc and this is likely negative more than $500/month even if self managed (much more than the negative $200 that you indicate you are ok with) 2) if you are behind on mortgage, how are you going to handle being negative $200/month, or more like negative $500/month?

You make more when it's uneven and you can live in the smaller unit.Focus on the asset and the area, as long as you can withstand net negative or breakeven cashflow, and you will gain in appreciation.

It is a tough buy and hole RE market everywhere but markets like San Francisco are particularly challenging in the short term due to the poor cash flow (negative cash flow).  

Some strategies to lessen the negative cash flow are: house hack and rent out the other unit as a mid-term rental (to traveling professionals or for people temporarily displaced because of insurance reasons like fire) or short-term rental (business or vacation).

Profits do not justify their effort even with the ADU addition in this case typically not being hands off .Here is a list of things that make ADU additions a less than optimal RE investment but the value added and starting with tens of thousands negative is a big one that needs to be well understood. 1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

1) Check with state building dept to see if they have a valid builder's license and if any negative issues with it. - PRO TIP: many builders lose their license then create new company in name of wife or other relative/friend.2) Check Better Business Bureau, but don't assume all the complaints are legit. - If there area MANY, then that is a problem.

It depends upon how negative you think you're gonna go.I wish you luck.  

On the negative side you will need to show how you will use the property to generate sufficient income.