I'm exploring all options at this point including finishing the home with other builders, as well as selling what has been built (slab and block walls of a single family home 4 bed 3 bath) to another builder or investor.Does anyone have any recommendations on where to look for potential buyers for something like this?

The idea of house hacking a duplex sounds like a smart strategy, and $25,000 towards the down payment and closing costs would be an amazing help.

I haven't, but just make sure the mentor has personal experience/success AND you have access to either him or a qualified coach for as many questions as you want to ask, versus just buying a course like some people offer. 

It's likely to keep getting eliminated in areas and while a good business for true business people who care about the people, 99 percent are just out for a small check and fail fast.

Once you transition one of the homes into a full time rental you will reap that benefit by filing a schedule E at the end of the year.There are a few loopholes to consider like calling one home a "Vacation/Second home" which allows you to pull out 80% LTV with a better rate. 

No need to make the downstairs tenant feel like there is a tattletale. 

Having been in the lending space for a while now,  Interest income is not passive - its considered/taxed as ordinary income- just like interest you receive from your bank and savings account.Regarding profit and expenses from a flip, "that depends" on many factors but again if its short term capital gains, its not tax friendly.As always consult with your tax advisor / CPA. 

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

Does that sound like I am doing this right or should I just buy the property subject-to with maybe a one year balloon, then just bite the bullet and close on the property and once it's fixed up turn around and sell it again.

Have you looked at a little bigger multifamily, like in the 5-10 unit range?