We are looking at a house that is being auctioned next week in Gulf Shores.

I am a complete rookie to the real estate scene, I am looking to house hack for my first residence out of college.

There isn't enough information in here about the current state of the house to be able to advise you, but I would think #3 is a definite no as it seems unnecessary from a cost perspective although that market has scale to accept it.

Buy an existing house to live in and add an ADU in the back.

Quote from @Scott MacComb: I am doing my first true house flip (have remodeled plenty of houses for rental) and am trying to figure out a contract to use with a new general contractor whom I have not worked with previously. 

Consider financing options like hard money loans, or FHA loans for house hacking, and focus on areas with strong rental demand near the MA/NH border.

Since the repairs were two owners ago, I would think the town may be a little more lenient with you.With the new kitchen and bathroom, were they existing and just got renovated or were they added on?

Quote from @Alan Mills: Yes, I would agree with Chris and Bill, but if you have an option to get around this by putting it inside the house?

Hello,I purchased James Dainard’s new book The House Flipping Framework on Audible.

I'm not talking about cosmetic fixes, I'm talking adding bedrooms within an existing floor plan, creating a second unit (like an ADU), etc.