I'd have to see your overall layouts but I think you are on the right track. we build 3 story stacked triplexes and it's very efficient so don't be afraid to go up either. anytime you build more than 1 structure costs are much higher but if its just to offset mortgage and you want to be separate then I understand. 

My husband & I really appreciated the bakery goods, not only because they were tasty but because they left the address for us so we could continue delighting in the offerings.

You can address your general questions at that point.

If you eventually convert the property to your primary residence and later sell it, the taxes would be prorated based on the ratio of time the property was investment property.These items should be addressed and discussed with your tax and legal counsel to ensure that the exchange is the best course of action given the restrictions and requirements. 

But if your goal is to cashflow positive from the Day 1, you may find it very challenging due to current day interest rates, high cost of construction and the fact you won't have the efficiencies of a seasoned developer building at scale.

.: You addressed everyone here as “fellow realtors,”@Maggie Zou. 

Some will be more efficient than others.

I have a follow-up question—what’s your advice on maximizing ARV while keeping rehab costs efficient?

I’m a full-time sales professional at a global GSI, so I’m seeking relatively efficient strategies.Has anyone successfully used cash-out refinances, 1031 exchanges, or other equity-based approaches to boost income?

Would it be a good idea to create an LLC, let's call it "2500 Oak Street LLC" (fictitious new address) then list the new LLC as the owner of the home?