From tax stand point I would think you can separate from primary and be okay with IRS being that IRS will not be local code enforcement.  

If this were my property, I’d run a detailed rental analysis (from what I’ve read in Forbes) to see if the short term route could outpace traditional leasing.

I’ve only ever done renovations for my rentals or primary home. 

What are the challenges of passive investing as opposed to traditional real estate investing? 

I've seen some pretty killer terms for foreign national Canadian loans from RBC bank, if they can meet traditional income qualifications.

It’s a great way to grow faster.HELOC or Equity Tapping: If you have equity in another property, using a HELOC or cash-out refinance could help cover the down payment without affecting your DTI as much.Seller Financing or Creative Deals: Look for sellers willing to finance directly, which bypasses traditional mortgage qualification hurdles.Scaling quickly often involves combining strategies—play around with what works best for your goals.

whats traditionally referred to as "DSCR" loans are not going to be eligible in non-state territories unfortunately

I strongly advise you to get your primary residence taken care of FIRST.

Is there a reason why you are set on a traditional duplex? 

Currently, I own my primary home and a rental in San Antonio, TX.