It was a big undertaking for my first project!

Every rental property we stabilize or flip we undertake is rehabbed immediately to the highest quality (like A+++ condition, just-renovated home for sale), so we wouldn't ever think of dumping more money into it once it's built/renovated.

If I could find a “brand new” 2 family in my area for the price to renovate this one completely I would simply buy it, but most of the existing multis need a lot of work which is why we’re going to undertake this project.

@Peter Faulkner ok, now I understand the tax strategy - but it is a big undertaking for the potential savings.If you want another set of eyes on the deal I’d be happy to take a look, just shoot me a message.

Did you merely purchase the home well or did you undertake improvements that led to the $200,000 of equity? 

My home wouldn't really rent for a profit in my area and either way it would be a huge undertaking to move everything I've set up here at this point, but if I were doing it again (and knew I'd be interested in real estate) I would have gladly pursued one of the many house hacking opportunities such as the one Kyle described - and that's what I'd do if I were in your shoes now.

It's too big a topic for me to undertake in a post or right at the moment.

They even file all of our taxes for us which in Hawaii is a major undertaking on its own.

It's possible your problems  are more extensive than mine were, if there is real problem with the whole foundation of the house settling and requiring massive undertaking to life the house, reinforce the foundation, etc, but if the problem is seriously just some cracked floor joists, then a structural engineer and a licensed framer should be able to take care of these problems in my limited experience for a few thousand dollars. 

I'm about to undertake a triplex conversion in Windsor and would like to reference it.