How would I do this?

[Michael Baybut]

I have been interested in a duplex property next to one on my rentals for sometime. It came on the market about 6 months ago for $169k. The owner bought it about 3 years ago for $165k. He's now dropped to $155k. My plan would call for a price no higher than $120k. The property is really, really rough. No possibility of rehab. It has a couple of renters at the moment but it has to be tough to rent. If I could get it at a good price I would rent for about a year to get everything set up for a demo and rebuild. Nice 2/2's could easily fetch $1000-1200 pm. I would build a duplex that would easily convert to SFH. Have the 3 car garage constructed so that a 2/2 apartment could be built at a later date there by keeping 2 units. The SFH with a rental should fetch a premium come sale day. How would you finance a demo and rebuild?
All advice appreciated,