As for the studs/ framing- it def looks scabby but they aren't structural and I'm guessing the demo team cut 1 or 2 out to see that crack.

As for rent collection, bookkeeping, etc I recommend you go through some online demos of different products to see what works best for you.

The play would be to wait a year and a day, demo the property, build a small box, spec home, and sell to an FHA buyer.

If you provide a scope of what you are demo-ing, you may have better luck with someone's experience to comment here, but costs can vary regionally, so a local contractor would give you the best actual estimate. 

I will be doing a complete gut, demo to studs to include replacing the floors.

@Qiong Yang If one unit satisfies your reinvestment requirement to purchase at least as much as your net sale then any amount over that can be used for your primary residence. 

The updates required to renew made the demo and rebuild more economical.  

Here's what the quote covers:- Conversion of 2 bedroom, 1 bath main house to 3 bedroom, 2 bath (~1040 sf footprint)- Demolition of existing walls (existing dining room wall, wall between kitchen and living, bathroom closet)- Finished Shell (Reframing opening to living room and kitchen, shifting openings for bathroom/bedroom, new walls at bathroom and dining, level - Replace all aluminum windows with fiberglass windows and screens- Upsizing plumbing, and relocating fixture locations as necessary- Upgrading electrical panels- Assume heat pump and ductless mini-split for heating and cooling- An allowance for kitchen appliances including combination range, hood, dishwasher, microwave, refrigerator, and washer/dryer- An allowance for mid-grade plumbing and lighting fixtures (Delta, Kohler, or equivalent)- Mid-grade plumbing and lighting fixtures (Delta, Kohler, or equivalent)- Ikea cabinets or equivalent with solid surface countertops, includes island- Assume solar system to be installed on the house including battery storageFor the garage ADU, the garage would need to be demoed and rebuilt, but we would benefit from building within the setback since the garage is on the property lines.

I have a contractor who is going to be doing demo and Rehab on one of my units.

Personally can't stand regular office I do not care how cheap it is UNLESS it is sitting on valuable land and I figure in existing building demo costs to re-adapt the dirt to a higher and better use than it becomes appealing.