I'm researching the options available for Tim & Jennifer to achieve their goals legally, without running afoul of tax regulations that would result in disallowed deductions, plus penalties & interest.

Working with knowledgeable professionals who can help with the strategies and documenting every step of the process, both pre and post is critical to make your accounts successful and achieve your goals.

@Jenifer Levini, @Jim KennedyIt has been my experience in Canada, that you need to involve both your accountant and your attorney to achieve the ownership structure which meets your present and (can easily morph to meet your) future needs while mitigating your tax liability along the way.While your attorney will have the expertise for form your corporation(s), the accountant will hold the tax knowledge you require as an input.

Although I am a big fan of Newburgh, I think it has a long way to go to achieve these kind of rents.

Everything in the world is mastered by knowledge, but one must WANT to study it in order to achieve that knowledge.  

With the 2% rule, if I’m going to be living in one half of the building, should I look to achieve only 1% of value of the entire building in rent from the other half?

Im in the process of remodeling my first duplex in a BRRR style fashion and will plan to refi when I’ve had tenants for 2-3 months, use the cash out for a second property.

Tudor style home, 3 bedroom, 6 car attached garage.  

It is also customary in my area for C class apartments to have window style unit AC permanently installed in the wall.

Ultimately it's about clarifying your goals, and creating a plan that allows you to achieve those goals in the best possible way.