Multi-family properties many times provide a better return per square foot than single family, which would be to your advantage as well.As long as you're mindful of the reinvestment requirements and purchase at least as much as you sold and use all of the proceeds, you shouldn't have any issues with this strategy.

@Cheng ChuMcKinney is a fantastic market with strong population growth, and it’s a great choice for single-family home (SFH) investments.

So I bought a single family home for 315k that was considered inhabitable.

Lenders stopped allowing rent by the room due to modifications done to the property resulting in functional obsolescence and significant cost to cure in the event there was a default and they needed to foreclose on the home and resell it, given that the main buyer pool for single-family homes are primary occupants. 

You will have people who might have been looking for a single-family home / not as savvy on the investment side coming in.

Issues 1) even garage conversion ADUs in single family zoned areas typically cost more to build than the value that they add.  

These buyers are playing the long game—betting on rising property values and rents, which offsets initial breakeven or negative cash flow.If you’re starting out, I strongly recommend focusing on single-family homes in neighborhoods at the high end of the "low-end market" spectrum.

My client recently purchased a 3/2 single family house for $160k that was near turnkey and already rented at $1900/month and in a very desirable residential neighborhood!

One thing that hasn't been brought up is if you put a property in an LLC, it MAY be subject to California Rent Control, even if it is a single family home.

I only have a single rental (at the moment) and a simple W2 job.