Adding an additional unit is generally best from an investment standpoint, but it sounds like your personal life situation indicates that duplexing down is the best option...especially if plan to live there long term.  

Today its difficult at 20-40% down to make something cash flow (in real life not on paper).

I'm scared of how much my insurance will go up after the LA fires but there is a cap with CA regulations and also being dropped. 

Specifically:Licensed and Insured Contractors:Strong experience in fix-and-flip projects is preferred.Proven track record for meeting deadlines and staying within budget.Interested in building a long-term working relationship.Real Estate Agents:Knowledgeable about properties in Chattanooga and surrounding areas.Skilled in identifying high ROI opportunities for fix-and-flip projects.Open to partnering with an investor for repeat business.If you or someone you know is a great fit, please comment below or send me a direct message.

It depends where you are on your wealth and life ladder.

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.

Quote from @Paul De Luca:Personally, I'm not a fan of enabling bad tenant behavior and in life you get what you tolerate.

(gross rents $4900; 8% PM; mortgage+insur+taxes = $3600/mo).

Like most things in life, we don't hear about things when there's no problems.

I've learned that it's extremely important to find balance in this industry as your passion for your business can impact your personal life greatly!