Hey Alex,This is a great question and really depends on your timeline.If you think you're unsure to the point where you'll sit our for a while you'll probably want to put your money safer, longer-term investments.If you're thinking about jumping in soon you might want to keep that cash on hand or in assets that can easily be liquidated to be able to make the move when the time comes.You can consider some higher risk/reward investments based on your comfort but I'd recommend minimizing the percentage of your portfolio you expose to those asset classes.Best of luck!

You can you passive losses to neutralize/eliminate passive income.

If they are professional, they can explain this quickly and easily.

All while the 'poor' tenant moves on to wreck the next landlords house, not caring one whit about you or your house.....Even if you could charge a $2000 pet deposit (and you should), there is no recovery for your time and angst...and sometimes the damage is so severe that it is permanent.This is spoken as an animal lover but I am in business to make money, and as easily as possible, with the least damage to my properties possible.I'm not concerned with the renters comfort or security like @Lotara Smith.

Every jurisdiction that I am aware of in San Diego that has a policy has restricted ADU from RE that has a duplex to quad and to the best of my knowledge none have been found in violation of AB 1069.However, there are various proposals in front of CA legislature that would eliminate this restriction. 

So if you do a good job screening your tenants and communicate well you'll eliminate more than 95% of your issues with tenants.Always pre-qualify renters before showing them the unit.

Then, once you've got a home established, you could easily recycle your benefit and get another 3-5 bedroom home and do it again. 

Methodically eliminating every item on the inspection report starting with the safety hazards to cosmetic.

Each unit can easily be turned from a 2 bedroom, 3 bath to a 3 bedroom 3 bath simply by adding a door and a closet to the basement.

The downside would be releasing a record low interest rate and fixed financing that is easily paid off over the life of the loan.Any additional options would be welcomed as well and thoughts are greatly appreciated!!!