Going to go the HELOC route if a deal warrants. 

There was no market data to show/warrant that this ADU added any market value.

This duplex I’m looking into was put under contract in July of 2017 closed in August for 42k and on August 11th a “special warranty deed” was issued for the property. They went in a gutted it and now it’s back on the ...

I am also including the following expenses:Property Management - 10% (We expect to do this ourselves, but are including it nonetheless)Maintenance - 10%CapEx - 10%Taxes - based on the listing, but would validate with the county if the deal warrants further due diligence. 

The deed should be a Special Warranty Deed, (or an All Inclusive Deed in some states) that warrants title except for the encumbrance created by the mortgage.

also, going by pure numbers, your initial investment for a duplex would be 120k and rents would be 1200 conservative, which equates to 1% rent/purchase (total investment) ( always see if your deal would work with the most conservative rents, not the gut intuition, because intuition won't pay the mortgage). 1% might struggle to cashflow depending on your expenses and frankly doesnt look like it warrants the level of work needed to achieve that.

@Pavel K.Because this is a non warrantable condo no conventional lender will lend on this. 

I think that can work IF you manually double check the comparable sales that come up, to make sure you really are comparing "apples to apples" (similar beds & baths, similar sq footage, same style of house, same neighborhood, sold within the last 6 months, etc.)I think that works for him because he's done his own comps for years (using MLS), but for a beginner I would say some caution is warranted - don't just take the "Zestimate" at face value and go from there.

The obvious downside to this scenario is that the tenant could become violent and you need to take proper precautions (like taking along a friend).Again, I don't know that this technique is warranted for this tenant - they just don't seem this bad to me.

George,I’m assuming here, but it sounds like the property was conveyed by quit claim deeds for several years in the back chain – normally that means no attorney/title company, title search, agents, or anything else was done that would have normally been completed at a standard transfer of title by warranty deed - quit claim deeds do not warrant the state of title by the seller and offer no assurances for the new owner.