Let's assume your expenses (mortgage, taxes, insurance, maintenance, vacancy, etc.) comes to a clean $600 and the property rents for $1,000.

In short, I can afford the additional $1100/mo cost of a second house, even until I rent it out.I have around $35K in HYSA and emergency funds that I could use for a down payment, but that's less than 20% which would be required for a conventional loan, assuming full purchase price.

I assume rates would tick up for such a low %, too.

(This assumes you have a credit card available to pay for any repairs.).

@Dave McIntyre were you able to / are you ever able to get access to the property after winning the bid but before closing (assuming it's  a vacant property)?

A little more info, I am doing a full cosmetic rehab on one of the units and a lighter one on the other but I am assuming if I am going to split the utilities I should do that prior to any rehab. 

At a 7% annual return, this could grow to $908K after 10 years, providing immediate liquidity and diversification.Alternatively, holding the property could yield $825K net equity after taxes in 10 years, assuming a $900K sale, with the potential to defer taxes via a 1031 exchange if reinvested into another property.

I have thoroughly researched many of the creative financing strategies (subto, wraps, assumable mortgages, and etc).

You might decide that you absolutely want to own your own residence there and I assume you can afford it since you already own properties elsewhere, likely in beautiful Hawaï.

If they seem agreeable, then you can ask if they would prefer to cut the cost down the middle or would they prefer to purchase the supplies and you will assume the cost of labor to install it.