@Scott EadieThe Millionaire Real Estate Investor provides steps for successful real estate investing, emphasizing understanding market conditions, local knowledge, and liquidity.

It will qualify for the cost seg as long as it was actively used in that year.

Wouldn't you be in at least the same place after it was rebuilt (barring changes in he local market I would guess the value of the property with an newly built house to be greater than before) 

But here's the kicker: the median household income in 2021 was only $56,746, and most households below that are renters.In the article local agents in the multifamily sector talk about why landlords are hiking rents.

Maybe see if your PM takes advantage of those insurance policies, which could help to alleviate that problem (if it is a problem).If the PM company is a licensed real estate brokerage, and they are members of state and local real estate associations, they should have access to a large number of websites that syndicate the listing.

@Brian Adams I am actively looking at this and there are duplex in the area.

Take a look at the local market and see what some 2bd/1ba homes have sold for and what they would rent for. 

Using real world comps & calendars from your personal experience, local PM's, online estimators.

Find your local Private/Hard Money lenders and partner with them.

The next steps will involve accurate construction cost estimates by a licensed contractor (or two) and connecting with a lender (possibly current local bank) for construction financing.