I think (emphasis on think) I have found a deal for me but here is my situation: I am a recent college grad with no 2 year income (just yet) and I came across this property inHamilton, NJ, in which i need between 100k - 144k after all costs (rehab, closing, 20% down payment) I do not have this money as a 22 year old, so I naturally wanted to get an FHA loan but the problem is, its a quadplex that has all units occupied, so i cant really live here because there would be no space, unless there is a way around this.

My complicated situation aside I just wanted to answer questions 2 and 3 from your original post, you can split after building an ADU.

Is there going to be a cash flow positive situation??

This stunning remodeled home is ideally situated minutes away from the beach and boasts a beautiful rooftop deck.

If you didn't, I would take a little ownership of the situation as well.

Is this typical when it comes to fix-and-flips and how should I approach and solve this situation that I am in? 

I would suggest getting with a tax professional to assist you since there's a lot of variability depending on your specific situation not only on a federal level, but with state reporting as well.

This home had the perfect layout for a house-hacking situation.

Norman,The policy I used most often on the fix & flip situation you described is a "Renovation Builders Risk" policy.  

BUT, it does mean that sophisticated lenders believe that THE CHANCE of default in said situation puts the loan beyond the “risk/reward” parameters that they’re comfortable with.