I currently own a duplex in NJ, I live in one apartment and rent the second one.

I wanted to jump in for a quick second and introduce myself.

Second-to go along with that,  I would triple check your landlord laws and/or speak to an attorney before you, yourself, enter the apartment without the tenant there.

The second floor has 3 bedrooms and should rent for $1,200. 

Second, the cost of materials is soaring, but hasn't yet stopped the demand for a new home on the buyer's side.I know for certain that some banks are flipping houses now, rather than sell off their REO properties for discount.  

A second for new flooring...luxury vinyl planks. 

My analysis is similar to what @Dan Heuschele          FYI: I went to The City of Vista meeting two weeks ago and they are considering reducing permit fees on Granny and Second Unit (Granny with Kitchen).   

I could pay 20% down for a second home, though this isn't preferred.Any other feedback?

I worked my butt off at a second job to drag my stupid mortgage back from 90 days late for months (divorce+job loss+housefire=TMI but now you know why) to one month ahead, but now I have 75% of my payments marked as late and don't know how the heck to fix it. 

so i'm leveraging my rental property's equity to produce a 5% down payment on a second home.