Lending rules are always changing and with covid19, who knows when those restrictions are going away.

I live in LA and the ADU restrictions have loosened so this shouldn't be too much of an issue legally. 

There are a lot of variables that go into density like zoning, lot coverage, setbacks, parking, height restrictions, access etc.

You get the interest rate of a primary residence (credit depending, it can be in the 2s nowadays), you don't have the LTV restrictions that you would if you were financing an investment property, and you can start cash flowing immediately and not have to worry about passing any sort of inspection.

For the first time since the pandemic restrictions, 2020 sales volume exceeded corresponding 2019 sales, up 19% over 2019.

There are also lots of restrictions with HOA but if you understand the rules and what you can and can't do the rest is just supply and demand.

Not condo. also pay attention to rental restrictions.

@Marci Matejcek Ontario, BC, PEI, Manitoba all restrict how much a landlord can increase rent.

There is no legal restriction on selling a property while it is leased, you will need to notify the tenant & work out a showing schedule with them (this part matters, access is the second biggest factor in selling property). 

I elected to do cash-out refinances on individual properties instead of the entire portfolio because there are a lot of restrictions and rules for refinancing or selling a property in a portfolio loan.