I would opt for the one bedroom options, as oftentimes people looking to stay in an ADU type unit like this, they won't need the 2 bedrooms.

The reasons are 1- less competition in commercial2- greater property types lead to more opportunities for “value added”3- commercial net income projections include expense for property management, 1-4 unit residential usually do not4- greater “universe” of properties to buy allow higher minimum return standards Of course residential is MUCH easier to successfully deal in, and with reasonable leverage has small downside risk, so I 100% agree that most investors should stick with residential.  

Real estate taxes vary depending on location and property type, but they typically fund local services like schools, roads, and emergency services.

Then speak with the planner to see what types of businesses / buildings they think are a good fit for the property based on the master plan for the area. 

Since we focus on mid term rental and they usually stay 3 to 9 months. Not short term.What would be the insurance to get?The standard rental insurance like for the long term tenant suffice or no?

There seems to be so much going on there and the environment is similar to San Diego (similar types of houses, wonderful Hispanic influences).

You sometimes go into the blind off of visual inspection alone because it's a good enough deal to absorb those types of costs. 

Sure, what types of properties are you looking for?

So, most investors are turning toward small multifamily or other hands-off type commercial real estate properties.Aside from buying an entire storage facility or small multifamily complex on your own, another more affordable entry point into commercial real estate can be found through real estate investment funds.

Its a gamble, and the quality of these types of things vary, so we'll see.