I am trying to owner occupy one of the units and live in it for 2 years, but Im not sure on the rules after the 24 months of owner occupancy period is over. 

Expenses: Mortgage: $3655.55,Property management: $470, Water: roughly 100/month.

Last month I warned you of the coming heat.

I would now cash flow $1,238 a month on this duplex.

From my understanding you can get a conventional loan for a STR, but you must live in the property for at least 6 months before changing it over. 

I advertised my first vacancy on Craigslist, which is also where I may have (memory on this is rusty) found my second property, ~two months after buying my first.It took me a few years after starting to invest locally (as a landlord) to meet someone who had been doing that for longer and in multiple markets.

The problem I have with your assumptions is you are suggesting he buys a $400,000 property and gets $3,000 per month rents.  

I had a contractor that I had to fire last month for a multitude of reasons (using my materials on his other job, extremely substandard work that has to be redone by someone else now, not paying his subs,  lying about work being completed that was not actually done, etc).

Deduct your late fees from the amount paid the following month.

We informed our tenants about the possibility of building two ADU's in our property about 2 months ago.