Looking at a large single family that I am going to convert to a duplex in addition this being a total rehab.

If it does, you may want to look at selling instead of converting to a rental. 

You might consider HELOC for quick & easy, then convert to a conventional 30-year fixed and wrap the HELOC up afterwards if that new payment would make sense for you. 

I recently converted my garage into a studio apt and all the appliances that i have  (Fridge, stove, microwave ) were bought used.

Further renovation will be negotiated if we find a tenant interested said portion as an art studio (option to convert to live/work mixed use space) to pay the land contract for the next 2yrs. 3-5yr plan: potentially keep previously mentioned small portion as a rental for income/ reno budget.

I use a Holding Receipt and Agreement that states we are holding the dwelling exclusively for them until a certain date and it will convert to security deposit funds when they sign the lease and move-in but will be forfeited if they don't.I don't like the word deposit, like holding deposit, because deposit can mean refundable. 

I will be helping a friend convert his Evolve property in SD to this setup soon and decided to setup a document on how to do it.

Great zip code, Garage Converted into 2 additional studios.

For example, if you have a "C" property, can you convert its interior finishes to "B" level?

It was just converted into a legal 3 unit to code with permits.