Collect and report the rent on your taxes (the rent income will hopefully be eaten up by expenses and depreciation so no gain is recognized). 

If you consistently analyze properties, recognizing a good deal will be much easier when it shows up.

I recognize other states may have zoning restrictions on ADUs.  

@Jeffrey KopsYes, Brian got my 1st course on options and this year much has changed.I can say with much confidence that anything you read printed in the past is out of date and will lead to issues with option contracts, especially for a seller.The IRS is joining other agencies in swatting down old investor methods it seems.With options greater than 12 months you have new accounting rules that everyone must follow, even mom and pop deals must follow GAAP rules adopted recognizing asset allocations and depreciation and treating a transaction as an installment sale, if it qualifies, and if not, as a sale.

If you want to buy whole loans, right now you are probably looking at getting 8-10% on those but also recognize that the interest will be taxed at ordinary income (unless you are using a SDIRA).

After getting burned a couple times by professional, experienced renters who quickly recognized our management inexperience, we began to pivot to increasing our knowledge of subsidy programs, mainly Section 8, which had inherent resident accountability measures modeled into their programs.

I'm not trying to throw accusations in people's faces here, but one must always look to improve oneself - perhaps you have a problem with tenant screening?

It may be good to just get your feet wet any way possible and learn the market so you can recognize and jump on a good deal when it comes up.

@Barrett Bridgewater <--------- is wicked smart and knows his stuff if they can get you the LOMA you will have the option to get coverage or not if your lender recognizes it (and most do).

I can imagine and recognize you're navigating some deep emotions with the whole ordeal.