You can't really go wrong either way; but you will make more money with the 16 unit. 

Private money and hard money loans are also available.

Do you have money to take care of the inevitable problems that will occur.

Self-employment tax will be required on the net gain, which will of course be 0 after property expenses and depreciation.

Also keep in mind that adding sqft will likely increase your taxes and local regulations might limit the use of the ADU. 

I would call some local leasing brokers in your area before you have any non-refundable earnest money to get an idea of the tenant demand for something like this and if you are new to retail leasing/investments I would highly recommend you hire one of those brokers to negotiate the lease for you.

It will help alleviate stress and help me ease into finding the right fixer upper that is worth the time and money to invest.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

Hi Bigger Pockets Forums, I've been saving up money from my full time job to invest in real estate.

He has talked up the tax benefits that I could take advantage of by making such an investment.