For this reason, I am thinking my best option would be to buy a SFH and rent out rooms.What are your thoughts on this?

I purchased this townhome along with several other investment properties to rent out as STR’s and mid term rentals to offer higher end options to stay the night in our town and enjoy the restaurants, shops, pubs, etc.

Seller financing is an option and may be a good option if you can find the right people. 

With this in mind, the individuals protected by this proposition may be more interested in moving, which will help free up some of the inventory and give buyers more options when it comes to purchasing a home.At first it seems like a good idea... till you get to the part where they increase property taxes.

There are so many options when investing in real estate.

My little brother is Autistic and they would like to ensure he’s taken care of to their best ability.We live in Los Angeles County.What is the best option for us as they intend to Gift me the property ?

This is Ventura County but no VC option on Bigger Pockets Personal Finance forum

One you get into the $350K to $550K price range you should be looking at 3-4 unit style properties or even 2-unit/Duplex style homes with a good size lot that can also offer an ADU option to increase rents without construction to the subject property.

This would help you avoid the need to do any type of reassessment and therefore avoid the need to file any property tax exemption/etc with the county.Additionally, this option would give you guys the flexibility on whether or not to move in while also offering you the capital gains protection via the Step Up rule (https://www.quickenloans.com/l...)

Building an ADU is an awful idea as you probably will not get that $ back and build yourself in a deeper equity holeComes down to either sell it or keep it, and really it’s a personal choice as you either lose a lot of $ now or lose it over time and hope it appreciates some day in the futureWe'd lose $500K...so that is not an option.