2-Unit New Construction Condo House Hack?

[Ryan Kennedy]

My wife and I are under contract on an urban residential lot, and we're trying to figure out the best way to utilize it. The lot has a small cottage in the back, and plenty of room for a duplex in the front. Our initial idea was to build a duplex, live in one unit, and rent out the other and the cottage in the back. 

However, I had the idea of possibly turning the newly constructed duplex into a condo, selling one unit, "buying" our unit, and still renting out the back cottage. On paper, this seems like the best deal for us to make money now and also make money later. Has anyone done something similar? I'm sure there could be some costly tax consequences to this as well, but I'm not finding much information online. 

Thanks!