My concern is carrying  a hard money loan for 6 months waiting for the leases to expire. 

After you subtract rehab costs, carrying costs, closing costs etc - the average Net for a Fix & Flip after 6 months is $15,000.Are you willing to risk your home to try to beat those odds?

Any sort of non-conforming use carries greater risk than if you're in conformance.Duplexes and SFRs are appraised in the same way - comparable sales. 

If you were ok with taking on additional debt (loans your tenants would pay down for you over time), you could potentially leverage that 475k into 10 or more cash flow properties (though there are limits on how many loans you can carry at once).Of course, there's always a middle ground too: sell the condo, use some of the money to increase your DP on the new house and use the rest for investing.

How much risk are you comfortable with?

Work out a deal where you earn a percentage of profits without risking any capital.

That's lower end entry...there is a wide range in Denton and there are opportunities, depending on your risk tolerance to look at higher end...in Denton County we are still undergoing strong expansion and are seeing spill over of development around the top of the lake. 

Or you can risk it, but I hear they are giving out $20k fines altho not sure if these are actually being enforced. 

Hard Money is risk-based, not based on your ability to repay (the way standard mortgages that look at your income, taxes, etc. are).

I'm sure they would perceive some risk in this scenario since they aren't financing the entire process, but I'm curious as to how their closing requirements (in terms of "showing the money") would change based on that scenario.3) What if I find a lender who will finance 90% LTV and 100% rehab, but my contractor is willing to wait for the draws.