Depending upon the roof truss's sometimes it's not real expensive to run duct work into the garage (but in this case it sounds like the existing hvac won't make that work). 

Certainly you can shop the house to investors, check Zillow, get two or three realtor opinions, and with the feeding frenzy that exists, someone else may see upside in being able to make a profit for putting in the efforts, and might pay you a retail price for the current condition. 

Gobble up the existing loans we'd have approximately $300,000 to fight with.  

It will depend on when her license went inactive and if she has kept up on her continuing education...she may end up having to take the classes again but if she calls the board they will be able to tell her what the requirements are.As far as joining a brokerage for investment purposes and not wanting to do the full "traditional" residential sales, I'm sure they exist.  

This may be a simple answer and you just refi with the existing lender and have them waive the penalty or you just pay it and include that cost in your modeling assumptions.

I suggest you do any maintenance or upgrades while the existing tenant is in place.

As an architect I love the idea of building new but if the cost of building new is more than buying and rehabbing an existing building it may not make you any money.

Use the loan that I just used to buy my first duplex in MN: Portfolio Conventional Loan, 3% Down Payment, No Mortgage Insurance (yes this loan really exists).

@Matthew JarvisThere is an existing thread on this subject which I started yesterday.  

Use the loan that I just used to buy my first duplex: Portfolio Conventional Loan, 3% Down Payment, No Mortgage Insurance (yes this loan really exists).