While a hand written addressed letter, I feel would get my attention a bit more.I won't be doing thousands of reachouts initially, just 250 or so per month so while letters would be more time intensive, I am open to it if the response rate is better.

Use the capital from the headaches to go find a less time-intensive property... 

Just hoping it will all work out.

In either case, you have to pay up to 25% on the 1250 depreciation recapture for any rental property and CG on the portion of the proceeds proportionate to the amount of time it was used as an investment, sooooo...things would be complicated and the savings on the second unit may not work out being that great.

Talk to me about the numbers. it would be less management intensive to just rent it out as 2 separate units and not 5 bedrooms. 

In the real estate investment field long enough, we all have losing investments; those that don’t work out as planned, and those that approach the “disaster” state.  

Hopefully it doesn't lead to a lawsuit as those rarely work out for anyone.

Replacing cast-iron piping can be costly and labor-intensive, and while the mixed plumbing indicates previous updates, you might want to get an estimate from a plumber to understand the full scope and cost of replacing all cast-iron pipes with PVC.

-They will pay for most maintenance, excluding large capital intensive items.  

Future tenants would likely appreciate the extra storage, and it could make your duplex more attractive in the long run without the hefty upfront investment that a full conversion would require.Another idea is to repurpose the shed into a functional office space or a private workout area.