then theirs charges 1000s in extra fees. 

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain. 

Tell him that you are running out of funds and you hadn't planned on the extra 20% he's charging on each bill. 

I'm imagining something more like add a wall, turn a bedroom into a kitchen-living on one side and a formal dining room into a bedroom on the other side, maybe add a half bath in each unit.

Just be sure to stay on top of your contributions, fees, and any extra paperwork so you can get the most out of those “triple tax” benefits.Hope this helps!

Stay disciplined and avoid rushing into deals without thorough due diligence.Resources for InvestorsIf you’re new to investing in distressed properties or looking to expand your portfolio, consider leveraging resources like:Local Realtors: Realtors specializing in distressed properties can assist in locating off-market deals and navigating complex transactions.Community Forums: Attend a local investor meetup or join online forums for the Phoenix market.Educational Tools: Search out webinars, workshops, or courses on investing in distressed properties.Final ThoughtsThe distressed property market in Phoenix is creating some excellent potential for the right investors willing to go the extra mile necessary to take on strategic risks associated with this category of real estate.

Ultimately it was sorted because I clarified they legally had a joint responsibility to pay the total rent and there wasn't even an option for "half" the renters to pay late.

You should track your own units expenses as well so when you move out, you can quickly reclaim any expenses or depreciation you built on the personal unit when converted into a 2nd business unit which would then be included on your schedule E.You also write off half of your property taxes, insurance, HOA dues, or any shared expense.

what would you think of a 14,600sqft 3 unit property in sailboat bend, off market, that is RMM25 zoned and has a nice single family and duplex behind it, half of the lot if empty so it can be developed or RV/trailer parking, for $1.1M?

At this level of scale, it is almost the same as running an extra unit.