I know it had forced air heating, but I am not sure what the current condition is.

Knowing what the terms and conditions of your loan will be will assist you in making the right offer on a property.

You need to really drill down to the market, neighborhood, property type, property class/condition, etc. 

Another option is refinance the first duplex out of FHA into conventional so you can reuse FHA.All this being said, make sure you have met the owner occupied conditions of your original loan.

The house seems in decent condition from the outside and I have yet to see the inside.

The ADU itself needs work and I have not yet fixed it into a condition that I'm happy to rent.

Gaining a conditional use permit can take A LOT of time and the zoning office doesn't like people telling them they're wrong.3.

Gaining a conditional use permit can take A LOT of time and the zoning office doesn't like people telling them they're wrong.3.

But for a moment, let's work under the assumption that the foundation is in good condition and within tolerance of being level (usually 1 inch). 

Not a one size fits all but definitely more risk with auction since you cant see condition which also means a better chance at reward. if you can find a way into the house or know someone who has seen the house or know the area enough it can be a great way to get BRRs.