Quote from @Khon Kounbandith: Investment Info:Single-family residence fix & flip investment.

Real estate purchase using reasonable leverage, at todays interest rates, will build up equity through amortization.  

Compare that to the performance of a new property (with that equity unlocked but also with a different interest rate as @Katie Ripp said).

We develop and consult new developers through the full cycle of development.Financing differs from project to project based on your equity, land cost, construction methods, etc.

Why don't you pull out the equity and use that cash?

If it adds $100K of value then the initial negavie equity is $100K.Now for the cash flow, $200K for $1800 rent is not going to produce decent cash flow with ADU financing. 

Quote from @Chris Seveney: @Brian Burke I am also curious what the investor equity position is.

Wondering if you have advice on me just being the bank, where I purchase a house and structure a rent to own with him and have him build up a 30% cash down payment and some equity and then me sell the house to him at a locked in price.  

Waiting until you get a deal under contract to then see if you can put together the debt and equity is a recipe for disaster.

If it is your primary residence as indicated, just sell it and skip the 1031I Persue all 3 payment options concurrently and see which pans out as your best deal.