Base your purchase price solely on the market itself, not off the revenue numbers the home has produced previously.

@John Underwood, thank you, I don't want to get in trouble is why I am asking here. 

This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return.5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space.6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties.

The trouble is we want to raise our family out of state but feel the smartest place to own a sober living is SoCal.” 

I would probably leave a State that is landlord-unfriendly faster than one with State income tax, as the potential pain inflicted by the legal system would trouble me more than reasonable taxes.

Much lower competition and really beautiful properties generally produce the best results. 

Some of our deals produce out size returns, but most are in the mid teens.  

This ensures you still build a tax-free bucket for retirement, balancing your overall tax exposure.Once you’ve handled debt and optimized tax-advantaged accounts in this order, you’ll be in the best position to funnel additional cash flow into real estate or other income-producing assets.

If it's raw land, they do have the option for a "hobby farm," which doesn't need to produce income.

We were able to produce our 2nd win in this very challenging market.