I don't really think this area is for new investors even though purchase prices are low, but if done correctly, you can definitely cash flow out there.

Not to mention you have a crazy low loan.So unless this is a cheap (sub ~$150k?)

You would need a good property manager to screen tenants to keep vacancies low.

Well if the value of the property is $250k, and there are 10 offers, then even $240k might be too low.

The reason I suggest that for you is that it would allow you to get into a deal for very low money down...you could even use a VA loan for nothing down and have a huge reserve.

My math brain couldn't get passed paying down a super low fixed rate first when I had 6%+ and commercial investment loans.Your way will be slow as I'm sure you know. 

The higher ends are full houses or apts with amenitiesProperty is located within blocks of a Cal State University so rental demand may be consistentCOC ROI is fairly low, but I’m comfortable getting a ~5% return on my first deal if it means that this is a learning experience.

.• In a low-density cluster development if it conforms to development standards of the R-1 zoning district, and the development and use standards of the low-density cluster permit.ADUs are allowed:• In R-1, R-2, and R-M zoning districts on lots that have one single-family residence.â�¢ On lots with a single-family residence In Planned Development (PD) districts that are subject to R-1 standards and uses OR the ADU conforms to the development and use standards of the PD district.• On any lot with an existing single-family dwelling unit, where regardless of zoning, the lot has any of the following General Plan Land Use/Transportation designations:- Residential Neighborhood- Mixed-Use Neighborhood- Urban Village or Urban Residential- Transit Residential or Rural Residential- Downtown- Mixed-Use Commercial• On two-family (duplex) lots and on multifamily properties• In a low-density cluster development if it conforms to development standards of the R-1 zoning district, and the development and use standards of the low-density cluster permit.Minimum Lot Size3,000 square feetNo minimum lot sizeMinimum Setbacks from Rear and Side Property Lines0 feet for 1-story conversions and new construction.5 feet for second-story ADUs constructed above a garage or accessory structure.0 feet for 1-story conversions and new construction.4 feet for second-story ADUs constructed above a garage or accessory structure4 feet minimum rear and side setbacks required for detached ADU in multifamily developments.Maximum HeightFor detached ADUs:Single story – 18 feet maximumSecond story – 24 feet maximumAttached ADUs are subject to the height limits of the main home.Single-family properties - No change in height requirements.Multifamily properties - 16 feet maximum height for detached ADUs.Rear Yard CoverageArea covered by the ADU, accessory buildings, and accessory structures, except pools, shall not exceed forty percent (40%) of the rear yard.Area covered shall not exceed forty percent (40%) of the rear yard or up to 800 square feet, whichever is greater.Detached ADU Allowed LocationsRear yard only, at least 6 feet away from primary dwelling.May be attached to a detached garage or other existing accessory structure.Must meet minimum setbacks for an accessory building in accordance with Section 20.30.500.No changes except that ADUs that exceed forty percent (40%) of the rear yard must maintain minimum 4 foot side and rear setbacks.

Generally the area has a lot of low income population, some crime, but seems rents are low and tenants are paying. 

It is relatively low value (50K), although it is in good condition after some recent repairs.