At this point in the market I have found $50k is about the minimum you will find a single family that needs about $30k worth of work and even these are not common.

This is a common issue.

Originally posted by @Russell Brazil:@Steve Vaughan is in Washington state...he might know Russ  google Joe Kaiser tax overages state of WA.. he was a maniac and the state of WA AG and him went toe to toe bare knuckled.and you can see the state won.. they dont like the overage game.. and many states and counties have followed suit.. either by withholding information or limiting those who try to grab overages to 10% finders fee.. when it was common to get 50% or more.Kaiser and a few others sold HOW TO  program called Hooked on Overages.. another thing that showed how easy it was and how much money U could make not really describing how dog gone tough it is.. 

With that being the case, could this potentially make 2 bedroom homes more desirable than the more commonly sought after 3 bedroom SFR? 

Then, I would run another analysis where it is a "worst-case scenario".

That way, in the worst scenario, you would still break even.

Worst case scenario a large amount of savings and a good work history might get you in the door (also assuming the rest of their screening comes back good) rent for a bit, then get mortgage for home.

@Daniel Weber @Chris Isley thank you both for the quick and grest insight.As far as the contractor is concerned, for this scenario, do you suggest finding a contractor who will (or can) subcontract other professionals (example electricians, plumbers etc) or finding someone for each particular job that needs to be completed?

It's common for duplexes to have an added illegal unit, and I own a number of them through the years.

If you have partnered with your Ira &  lend $$ from your IRA in the scenario described it will be a “prohibited transaction” and blow up your Ira. see if you can get a non recourse loan from an allowed person, Ira, or company.