I ended up with a non-finance, valley job and supplemented my smaller income with real estate. 

If we do the cash out option though, we would aim to buy by end of Oct or Nov this year, second property by Apr or May 2015, and a third by Dec 2015.Current DTI ratio is 19%, and would remain 19% if take cash out option as monthly payment is virtually unchanged from current payment.  

Unfortunately, in real estate investing, it's shoot first-aim second - and it's costly.  

I am aiming for APPRECIATION rather than BIG cash flow since I am not going to get good ROI with this rental (since it is a 495K property) and I am 100% FINE with low ROI just on this one property.

The aim is to use a 1031 exchange to move up to, eventually, a 15 door property so that the day to day can be handled by an on-site manager, and I am able to allot my time wherever I deem necessary (probably more real estate).Hopefully, that was all clear.

As the bay area housing market does not seem to slow down, I am looking to buy a duplex or single family w/ADU as my primary residence for supplemental income.As such houses are in high demand and few to come by, I am also considering a single family with a potential of building an ADU in the backyard. 1.

I aim to have the first room listed and the plans submitted for the permits within a few weeks. 

Sounds like you're interested in steady monthly income but are you looking to live/retire on this income or just supplement what you already have.

Aiming for $1600 Lessons learned?

For that reason, I'd aim for a 1-4 unit play.