There are coastal commission guidelines in addition to the zoning and building department requirements.

If I were you, I would look into the HELOC to access your additional equity.

Additionally, the schools for this neighborhood are excellent.

I do however, think that it would present a very unique opportunity for a buyer with children whom wants to relocate from the city (easy commute in) and perhaps have additional rental income, OR move the in-laws into the ADU. 

In addition, try to network with a realtor who may have some buyers that had deals fall apart.

In addition to the educational components you mentioned, I suggest you network with like-minded investors locally to you and in the areas where you plan to invest. 

Does UMMC offer any incentives in addition to Live Near Your Work?

I could easily put in an additional 30k or so and purchase something in the range of $800K.

A full review is required when a primary buyer is putting less than 10% down or when an investor is putting less than 25% down This review requires a long form questionnaire, budget, by-laws and possible a couple additional documents. 

Save up, pay cash, get reliable but a good value...the best rule of thumb to live buy is put as little of your money into things that go down in value as you can...which is basically everything EXCEPT Real Estate....and maybe stocks...but basically you are only authorized to buy real estate from now on haha..I am half kidding...half.Pay off the debt, cut the expenses, save money like a crazy person and keep doing what you are doing...Live in flips are one of my favorites....even better, live in flip plus AirBNB for part of the year in a hot market airbnb market