Building a wall and door to enclose the duct work and Hot Water Heaters - $1675Move the hot water heaters from under stairs to new room - $1265Move the washer/dryer from the laundry room under the stairs for tenant upstairs - (cutting concrete to move drain lines and installing new 220 outlet) - $3,520Remove wall in laundry. take out current door and add another door - reframe, sheetrock, - $4,180Create new bathroom with washer/dryer added, new shower/tub, new vanity, new toilet - $7150New kitchen cabinets and countertops - $4,290Move stove - new outlet - $675Replace bedroom ceiling - $715Replace pocket door in bedroom - $300Create master walk-in closet off current bedroom - $775Paint entire unit - $1300This includes labor and materials.

if your problem is capital and not your DTI. there's really two ways to go about this. 1. simply save. qualifying for a  200k place means you have probably 9-11k saved up for a place including closing costs. so just increase that by 50% and whoop theres a 300k place for you. with some strong saving, you could probably do that in 6-12 months. 2. use gift money from friends and family. you can take these gifts for personal residences.

@Michael L. hmm you could use chucking to pay more towards the principle then the interest avoiding the refi and the 13 years you still owe on the property the time frame would be cut in half (at least by  half) because now your paying more towards the principle, your credit might take a hit but you get to keep the property and rent it for your 2400 a month.

In my area 1% doesnt cut it because of taxes and insurance, I need to be near 1.5% to make it work.

If they insist simply say they did not meet your qualifications that you set .

I just want to add that retirement accounts are designed to be invested passively, a better use for your Roth IRA money would be to simply be the bank and lend it to another flipper.  

It could simply be priced too high.

Can this model survive if salaries are cut 20-30%? 

A duplex and a home with a secondary suite simply do not compare.

Heck, I'm surprised we haven't already seen the 'cut & paste' guys who post the same boots on the ground posts a dozen times a day.