A combination of mortgage notes for cash flow and desirable properties in high appreciation areas (not cheap, undesirable properties in the Midwest.)

I would recommend a combination of a house-hack and an investment property depending on your current cash position, short-term and long-term goals. 

Partner Driven financed this deal using a combination of private capital and partner contributions.

Partner Driven financed this deal using a combination of private capital and partner contributions.

If he has tons of time on his hands and wants to get his hands dirty, flipping could be an option as well, with a combination of his money + private money. 

When an entity is structured correctly you’ll be able to qualify for deep tax deductions against your w2 income through the business combination structure ( A structure that qualifies an individual for deep tax deductions) 

Then when they moved in, the washer broke and replaced that…and then the microwave broke and replaced that.

Be sure to clarify the lender's stance on total CLTV (Combined Loan to Value) at 100%, as not all will accept this structure.

Or a combination of both. 4 months on the market and lowering it to $1700 tells me that you might have a dump AND/OR your comps are WAY off.

Combine this with poor ADU valuations (especially in single family zoned areas) result in hands off ADU additions costing significantly more than the value they add.