Hey @Dalton Foote - I highly suggest  using a renovation loan and house hacking a multi-family if that is possible with your current life circumstances.The 203k and homestyle renovation loans are just amazing products and drastically help you reduce your risk, in my opinion, because you are able to leverage the cost of the entire renovation with such a low down payment loan.We work with a lot of clients who use these products in Chicago, and no matter what, in the long term, they gain great equity.If you aren't able to house hack - the process is essentially the same, but just with more money down with hard money or conventional construction loan.

BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

She is renting the apartment, not the entire property.It's very important for landlords to understand Landlord-Tenant rights and maintain control of the property.

Specifically the area I marked in yellow.Any help here would be highly appreciated.Thanks!

I lived in the downstairs unit and rented the upstairs apartment.

In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

I could come up with a down payment for an investment property in a different state easier than my home state at prices are pretty high in the 300-400 k just for townhomes.

BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

We are excited to be a part of your investing journey in the beginning and hopefully for many years as you continue to grow. 

I have not paid retail for RE in many years and would not in my high cost market (average SFH is ~$1m).