If you buy the other house to live in and finance the other house with what is known as a purchase money security interest, your paid off house will be safe. This is because CA has an anti-deficiency statute that protects homeowners from having to pay for the difference between what the house is sold for at foreclosure and the amount of the mortgage.
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As noted, CA's anti-deficiency statute will protect you personally from a lender for any deficiency over and above your "purchase money" mortgage for this 2nd house. You'd also be wise to keep title to the 2nd rental property in an LLC, which will also protect you and your paid off house from any liability issues from this rental property.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.