(Just kidding about the bucket, I'd make them buy their own bucket). ;-)However, if it's cosmetic,I'd just wait until they vacate.  

I found an off-market duplex with ADU that is non-conforming, and I would love to buy it to rehab it (keeping all 3 units).

Question 1: should I wait for mortgage rates to come down and then refinance and take out a HELOC and use these funds to buy another property?

The old saying of buying the ugliest in a great location fits this property, but after reading other posts I know there will probably be difficulties with gaining clear title from an Upset Sale in any sort of timely manner.  

We are all aware that the GSE’s Fannie Mae and Freddie Mac buy a large share of mortgages.

I am not sure if you have been following the news, but the whole world has just changed for agents with the way rental and buy side commission is done.

And make sure that all items necessary for you to get the best rate possible from your carrier (like 4 point inspections, roof attachment points, pool enclosures etc) are present or available.One nasty little factor that can't be helped is that every time you buy a property for more than than last owner paid - you will have a tax bump due to re-assessment. 

I wasn't set to buy with REI. 

I'm planning on buying in the Raleigh-Durham-Chapel Hill Region of NC. 

1-4 units the floor rate I have recently is 6.5% for 30 year fixed residential. good credit, ratios, etc factor in but par is landing around 7.25%-7.5% without buying it down.