Land where duplexes can be built are pretty easy to find.You will need 20-25% of total cost for down payment/equity for a construction loan.  

I’m looking into alternative methods to house having and MFH run for $700k+ out here.At the moment, I live in a detached garage converted into a 600sf 1bd/1bth.Since the 700k price point for a duplex with max 3bd/2bth unit to rent it out of question for me, I was thinking of the possibility of picking up a smaller house with the possibility of converting a garage or building a separate addition that my wife and I would then be able to live in while renting the main house.I know CA is becoming very favorable towards ADU’s now a days and was wondering on if this could qualify as a primary residence for myself as well as me be able to use potential rental income for me to be able to qualify for a loan.Still new to BP and REI, I couldn’t find a google answer on this, so any help would be appreciated.Thanks!

Transaction costs can eat up a lot of equity if you move n a year or two.

Do not expect to get bank and credit union favorable rates and terms, it will not happen with Hard Money loans.I wish you the best and if you have any questions or concerns just contact me.  

That gave you a healthy equity position in your properties. 

Eventually consolidating their equity via a 1031, to step up to small apartment buildings.

The key to having a favorable experience with a  commercial lender (including my company) is finding a lender that offers exactly what you wrote: fast, reliable, and excellent customer service. 

I did find one lender (Stratton Equities) They have a prepayment penalty within the first 7 years, interest rates is like 8% and I have to bring 20% to the table. 

Now that I'm more educated on this stuff I want to invest that equity into a better rental.I can have the tenants go month to month at the end of their lease and then non renew.

You don't want to lose your equity if something goes wrong.