@Ray Lai I do have 5% allocated for property management in my numbers.

I will provide my opinion to your questions as it applies to San Diego:1) the high LTV increase the negative cash flow that is present even at 80% LTV when properly allocating for all expenses. 2) in general, all high LTV residential purchases have negative cash flow when properly allocating for expenses. 3) adding an ADU in most San Diego markets adds less value that the cost of the ADU addition.  

You better have an agreed upon method for arbitrating potential disagreements and allocating the responsibilities and obligations between you.Write out the list of items and enter into a written legal agreement like you would with any other business partner, because this is still a business agreement, first and foremost.

All 4 units collect rent (as if I were NOT living there)2. 5% down payment3. 50% rule for expensesThe cashflow would then be combined with my W2 income that has been allocated to RE to help cover DP/closing costs/emergency on the next fourplex purchase a year later.

I would take some time and calculate whether the warranty is cheaper than your separate "savings" from your rental income allocated to cover capital expenditures.

As a rule of thumb, I like to allocate about $250 per month to this ($3000 per year), knowing that most months I do not experience the any repairs, but once every now and then I have to devote a few thousand to a renovation or upgrade. 

I will run my numbers with and without this allocation, but including this will result in the most conservative approach.

Still it's money that would be better allocated towards principle on one of my rentals.  

I do expect to need to replace the HWT and furnace within the next few years, but that is an expense that I am prepared for with money allocated toward maintenance from rent.

In short, in real estate you can control how you allocate fixup funds, tenant selection, etc., but lots of variables (as Charles mentions) are beyond an owner's control.