So unless it is just cosmetic stuff, they most likely won't lend on it.I will also say that Multi-Family is tough to make work out here as well, because of the competition, as @Maria Bakaj mentioned for rehabs there are just a lot of investors and big players willing to pay premiums or cash, so it is hard to compete at a fair price. 

I am still trying to work out the kinks if I want to live in the rental unit.

@Matthew Hoef I used to work out of an appraisal office in Royal Oak.  

It's tough being out of state, but I would get quotes from other contractors and consider piecing the work out so you get the best pricing and don't have a GC adding money on top.

Start with air bnb if it does not work out switch to rent by the room.Goodluck man.

Since depreciation is calculated on the asset value rather than the invested equity, this could work out nicely for you if you find a highly depreciating asset. 

What are the pros and cons to both and which one might work out best?

You'd need to include electric in the rent, but it's not hard to work out an accurate number- it would take monthly communication on this topic with the tenants for the first year.

@Forrest Faulconer Very difficult, sellers here in Las Vegas are attempting to sell rehab jobs for full retail value and they don’t care how long it sits, even as a beginner I understand that most of these prices are not deals for a fix and flip so I’m thinking of BRRRR to compete with retail buyers because rehab formulas are not working, it’s been overwhelming but I feel it will work out over time.

The combined potential income from renting the primary residence and the ADU seems to work out really well.