Instead you will cash flow right out of the gate and appreciation is faster in those states with TLC properties or adding things like an ADU, or Carriage home on a bigger lot.Most of my investors that live in CA purchase in those states listed above and in most cases its easy to introduce them to local Seasoned realtors Contractors, Handy Men/Women that can help them save money and feel secure about the distance from home to REI.

I see SO many properties in the upper midwest that have ample yards or even existing structures like carriage houses and detached garages yet prohibit ADUs.

After buying and selling multiple pieces of real estate, we still own a house hack (somewhat unconventional approach with a carriage house & primary home), but we love the flexibility it affords us. 

That way there you can help speed up and increase your ARV, or rents.Since you have reserves you can either use your funds or a loan to also build an ADU or carriage home if you can find a multifamily home that offers a good size lot.

As a Value-Add there is also the original carriage house that is a detached structure to the property that we'll be doing as a permitted ADU / Tiny House.

Another alternative is to buy another house hack type property, but instead of renting rooms, why don't you purchase a 2-4 unit property or a house with carriage house, that way, you can still invest and it isn't as risking or requiring external capital partners besides finding a lender. 

It As a Value-Add there is also an original detached carriage house that can become a permitted ADU.

Currently, the back house is not permitted as a living area but I believe as a "Carriage house".

I have a gutted carriage house on the back of my property, so my thought is to get my feet wet with house hacking by creating space for a longterm tenant. 

I've been building a 1 bedroom carriage house on the property in my spare time for the last few years which my wife and I plan to move into in the next few months so we can rent out the house.