You bought a property with no real goal in mind, so you get distracted by a shiny object (fast equity).Let's say the house is currently worth $500,000 and could conservatively bring in $25,000 a year as a short-term rental.

I liked this advice, and paid a contractor to put in new floors and spruce up the unit and when it came to rent, I had a surprise….After pre screening many folks, I had a few showings with very qualified potential tenants, and they really liked the first floor, but when they saw the way the bedrooms were laid out upstairs, it was a dealbreaker every time. 

That is set in stone.Option 1 -  I put in a 2 month holding time to let me split the lot.

Include buyout options, if more money needs to be put in, who spends it, how long before you sell. 

Like @Kevin Sobilo I put in my requirements and pictures of the property.

On a similar topic, what best practices do you put in place when repair costs run high?

Team building in this case is just a distraction, but nothing wrong either with preparing some names ahead of time.

If I am going to put in that much time and effort, going after bigger deals makes so much more sense.

If you go over 3600 sf you will need to do a fire flow test and depending on the results may need put in sprinklers , although it doesn't sound like you will be getting that big.You need to park both units (duplex or main house+ADU), each unit needs 2 off street parking spaces for a duplex; main house needs 2 but an ADU only needs one and it doesn't need any if it is within 1/4 mile of an Imagine Austin Corridor (Burnet or W Anderson both are I believe).Also a duplex needs to have a shared wall that is at least half the length of the depth of the building (the wall can jog and zigzag, but the total length has to be >.5 of the overall depth front to back of the building).  

That's what I was told about trying to rent out room by room or the downstairs unit (if I were to put in a kitchenette it would function as a studio apartment) with the house being considered a multi-unit.