But it definitely works around the w-2 income problem, so that would probably be worth it.As for purchase price, we’re already going the seller finance route with a six month deferral on payments and a five year balloon, to make the renovations less impacted by initial cash flow.

Based on my limited knowledge of AI, I agree that it will be used in the not-too-distant future to underwrite transactions, just like it's currently used to draft contracts and legal pleadings. 

In addition to the negative equity position, ADUs have other issues:1) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged (HELOC, cash out refi, etc).

My initial intent was to sell the property to another investor to increase my capital and invest that into other projects, but I have changed my mind and want to use it as a rental.

With the lighter value add you wont get all of your initial money back but depending on the deal you will be able to get a good majority back leaving maybe 7% - 15% in the deal.

This enables you to possibly profit from the property's appreciation even in the event that your initial cash flow is negative.Opportunity Cost: Investing the money you would have saved by making a 20% down payment on a different property might diversify your holdings and raise your total return over time.Appreciation: The return on the lower original investment may surpass the negative cash flow if the property increases at a rate of 5%.Considerations:Market Stability: Although Florida has traditionally seen rapid growth, it's important to take the stability and possible swings of the market into account.

Each strategy listed above requires different experience, risk tolerance, network/connections, project management and initial capital investment.

Once we fix our side up and move in the property should be worth $200k-$250k (it was very undervalued at time of purchase).Why not take a larger loan initial on the purchase of the first duplex and lower your down payment, use the cash you have for the second purchase.  

I am leaning towards remodeling since it would be my primary residence initially and perhaps I won’t get much return on my investment but maybe just sell it to family/friends instead… well, time to find a contractor!

This is extremely common in the Detroit market, but it seemed very odd to me initially also.You simply put an inspection period in your offer so you can walk it and decide if it's for you or not.In terms of rent rolls, etc. you may not be getting a response on this for the same reason.