@Sarah Minor, You'll receive that money at the end of your exchange. 

My realtor suggested offering it amortized over 30 years with a 15 year balloon, as that what she sees her other investors doing: focus on the cash flow, then when the 15 years is up, do a cash out refi, exchange, or sell to move into something bigger or better.

We'll see you in a bit on the 1031 exchange side of things. 

Doing this like a brrrr I see as the best bet, for example my property does still have room for improvement adding a bedroom and bath to the primary structure and then the ADU.

I will probably sell it after this couple moves out in 2 years to do 1031 exchange.

The safest bet is to try to get a variance from Union City. though clever, your combined unit lease agreement would likely cause trouble if ever scrutinized by the Tenants or the municipality. 

My recommendation, house hack, then move on, and then consider selling with a 1031 Exchange, take out HELOCs, etc. to build the portfolio.

If I had a kid like you in my community, I would be happy to let him/her help me with tasks in exchange for training.Do your parents have good credit?

I think the outskirts are you best bets!

And that gave us a feeling of security that allowed us to take "riskier" bets.