And I'd also say that medical professionals are just one slice of the pie when it comes to medium-term furnished rental tenants.

I think the answer to this question really depends on a few factors such as your current unit count, location of your properties, long term goals, and how much of your income is based off of your units. 

Do you think they hold better ROI and long term investment to put on a SFH house hacked property that has enough space for the ADU or do you think it’s better to do the shipping container route for $20k?

They can close in less than 2 weeks but without seeing the deal terms even if you are a stellar borrower they can’t fund guarantee they’ll lend.  

In terms of exit strategy, I intend to keep the property long term. 

I would not invest if the good guys are losing ground, but that would run counter to your description that it is an appreciating area.It looks fine to invest in for the information you shared if the long term forecast for the area is safe and stable to improving.

Here’s why it might be a smart move:Maximize ROI: With leverage, you can control a larger asset value with a smaller initial investment, potentially increasing your returns as the property appreciates.Preserve Liquidity: Keep your cash available for other investments or emergencies while still participating in lucrative real estate opportunities.Tax Benefits: Deductible mortgage interest and expenses can lower your taxable income, enhancing profitability compared to an all-cash purchase.If you have the means to buy with cash initially, you can later refinance to unlock equity for further investments or improvements.

Madison has pretty strict short term rental rules if you don't live at the property, so mid term furnished rentals is a strategy I have seen done here. 

I passed because the terms just didn't cut it.

A lot of people are fearful right now.I'm just over the hill in Reno, NV and chose to live and invest here because our property taxes do not reassess on the sale, landlord/tenant laws are much more favorable, and there is steady job and population growth, but we're still very close to the benefits of CA.