If you go with a conventional loan for the cash out refinance, seasoning periods are longer which draws out the process. 

What happens if you buy the duplex with a conventional loan with the purpose to build an ADU to move in shortly afterwards?

@Tyler Kesling  Adding to the above great points, start with 2-4 units as it's standard conventional financing.  5+ units is commercial and somewhat of a different ballgame.   

@Rick Albert   I may get a lot of push back from the team but I split my utilities on my ADU the conventional way....each dwelling has its own meter for water, electric and gas. 

Commercial lenders are not playing by the same set of rules as conventional lenders.   

As an investor, you'll need to wait until this period expires before your offer will be considered.Additionally, Freddie Mac may require proof of funds or a pre-approval letter with your offer, and they often prefer cash offers or conventional financing.

Conventional Loan How did you add value to the deal?

My strategy is to use HELOC to cover down payment and convention loan to cover the rest of the mortgage.

Fannie/Freddie now require 12 months of seasoning for a conventional cash out refi in order to use the appraised value.

Also, make sure there aren't additional restrictions on the property condition, compared to a conventional loan.