The other $500 goes to plowing the street in winter, lights for entrance, insurance etc.  

It's not easy finding that in Philly, with its attached row houses (rare to find a rear egress for private entrance) and notoriously nasty basements, but we did and it has paid off massively.

I also want to make to put a kitchenette in the basement to make it a full Studio, with its own entrance.

You'll need a separate entrance of course.

If possible, no additional exterior entrances should be added.

.$1700 - 3 bedroom up - New floors, paint, knock down 1 wall, add washer dryer, modify front entrance for common foyer between units$1400 - Basement unfinished - turn into a 2 bedroom unit, kitchen, bathroom  - 40'x20'Widen drivewaySplit hydro into two metersFix upper then rent (2 months) then work on lower (4 months)Refinance after 8-12 months. 

I would suggest trying to find Single Family homes where you can have separate living spaces (walkout basements, separate entrance) that way you get the comfort of a duplex without the price. 

For example, basements with separate walk-in entrances, etc.

Key criteria for a successful SFH househack:Suitable zoning criteria, i.e. room rental laws (county by county)Within 1 mile of hospital, major company HQ, public university, and private university (to attract 20-somethings)At least half as many bathrooms as bedrooms (i.e. a 4 bed / 2.5 bath could work, but 4 / 1.5 could get sticky)Plenty of driveway space / street parking (1 per roommate)Plenty of kitchen space (since the kitchen is the most occupied room other than individual rooms)Basement or side entrance entry point (i.e. if you wanted to turn the basement into your living space, you could enter from a side entrance)Un-involved neighborhood community (cul-de-sacs can be the worst spots)Turn-key quality (i.e. you won't need to fix much of anything when you move in)This list is by no means exhaustive, but things to think about when you work with an agent on a SFH househack.

Also want to add a separate basement entrance.