The lawyers went after the contractor's business and personal property, and eventually put enough heat for the contractor to repay without having to go to court - not only the money he walked off with but legal costs too.

Quote from @Alyssa Campbell: I own a townhome in Portland, Oregon that has a legal ADU so I it has two separate tenants.

I'd rather not take the legal route but need some commitment that they'll pay the outstanding amount shortly.  

Inventory is tight, and demand remains high, which makes single-family homes nearly impossible to cash flow unless you’re bringing a large down payment or looking long-term or perhaps even Airbnb.

I choose the second approach.Since I focus on various states using creative finance, it's important to me to keep current on what is legal in that state.

Not impossible...maybe some people want that MIL or ADU or office/studio, etc at home, but that is a smaller pool than general public. 

I would agree and contact an attorney to see if there's a case here, but this is not legal advice. 

The bummer is I’m in Fresno Ca housing cost is high, rents are low, insurance sometimes can be impossible to even purchase.

This is not tax or legal advice, this is just my own quick and dirty calculation when buying for personal real estate for tax benefits.

Implementing the proper legal and financial structures can help shield your personal wealth, reduce your exposure to litigation, and limit access for potential creditors.