Personally, assuming both properties are in a decent rentable area, I would go with deal #1, because of sweat equity.

on the BiggerPockets forumshttp://www.biggerpockets.com/forums/223/topics/408336-first-flip-to-rent-finished-successI just outlined how I found a property, did rehab with sweat equity and am in the process of cash out refi currently.

We would love to find a fixer-upper to live in while we add some sweat equity. 3) We would love to connect with a real estate agent who works with investors (I've seen a couple of you around here).  

You are not allowed to work on your own units because it is considered sweat equity and viewed as a form of payment into the IRA?

Conversely, there are about 12 ways you can earn money as a Syndicator by contributing sweat equity, in addition to making a return on any cash investment you may (or may not) choose to make.

Maybe they can give you an estimate but then there's sweat equity vs. handyman vs. licensed/bonded contractor prices.

I will say live in flips are great because you can put in sweat equity over time and save a lot of money until your ready to sell. 

You're contributing the "sweat equity" and the investor contributes the capital.

Sweat equity is the key if you are intending to sell.

It was a lot of sweat equity but after learning about the BRRR method I was able to successful get all my money out of the house!