To add on to Charles' thought, what helped get me over the fear factor was looking at each strategy as a process.

If you want to have a higher exposure to applicants with vouchers you can post a free add on www.GoSection8.com   You find your own tenant  You are not allocated tenants or given a list.

Another option would be to keep the current structure and build onto it, it is just very ugly, so I am not sure if it is possible to add on and make it look nice...

Remember you can always add on as you learn more and get comfortable.

Let me add one last thing . . . if you take the time to read a discussion/blog post/etc, adding your $0.02 is only going to take a short amount of time more than you've already spent.

Buy a property that has potential for value add on ... put 3.5 %down say you spend 40k on closing and down payment then use remaining 50k to put up some walls... add a restroom and a gas range(won’t be 50k) ... now you have a separate unit ... in LA you’ll rent for at least 1.8k/mo ... you can live there and cut your mortgage expense by 1.8k or rent it all out and cash flow per month.

@Niomi SneddenI’d just add, “only” $100k is more than enough.

Thanks I second Scott's vote for www.storageunitsoftware.com (Easy Storage Software) and would place it at the top of the list because of the in house call center add-on that they offer. 

If you need a preapproval, my network of lenders can have that done in under an hour and then add on my 5-10 minutes.

Is there room/zoning to subdivide the house/add on to create more equity or cash-flow that way?