So as long as your insurance, property taxes, property management, utilities maintenance, repairs, vacancy, and capex come to $4/mo or less you’ll be fine.

From time to time I will hear of people who utilize it well and gain business from it. 

A realtor who used to have a PM company called "JBS Realty" until this month.He used to manage 8 of my properties and is currently refusing to pay out multiple 5-figures worth of rents/property reserves/security deposits/unpaid utility bills owed. 

Especially if you get a long term resident in the ADU and then you might can utilize them to help on your turns of the MTR. 

My question is - what is the best strategy for utilizing my home equity and buying my first rental?

This step would include understanding City zoning & platting, locating utilities, researching City codes for development requirements (big ones include detention), etc. 

Remain responsible for rent, utilities, and other terms until a replacement tenant takes over.#2 can be a bad option in the middle of winter when renters are harder to find.

.: Quote from @Mark Cruse: Not sure why suggesting a person utilize an off-market strategy is bad.

Rent out part of the space at least to help pay for mortgage and utilities.  

Are they sitting on concrete foundations with full utilities to each?