There are never full photos of the mechanicals and basement and roof line so you will never have even a bare inkling of what the potential repairs will be.

But even then you still need to have cash available.

Even if I take the 15% tax hit I would make $32,000/ year on the remaining $400,000.    

First thing I'd look is the zoning for that property to ensure ADU/multifamily is even possible.

When choosing tenants (I am in California), it's important to avoid even the appearance of discrimination, especially during in-person meetings.

We always like to believe they wouldnt do that, but believe me, it happens, even when you dont expect it.

Basically, someone who already has the relationships with accredited investors and can assist in the raising of funds? 

And could even get a second home loan if doing traditional financing.

It might be best to consider wholesaling it and letting someone else finish the project, break even and move on.

The seller is out of state and even visited the project a few times to check on the progress which I think helped him feel good about the whole deal as well. technology made the whole process a lot easier in the interim.