Plus, you get to enjoy lower utility bills and better comfort in the meantime.

These two elements often get overlooked in the excitement of deal-making, but they play a critical role in the long-term success and sustainability of your investment journey.A well-thought-out tax strategy helps ensure you're maximizing all available deductions, utilizing the most favorable tax structures, and ultimately keeping more of your hard-earned income.

Create a Joint Venture Agreement that specifies the following: Recitals; Rights, Duties, and Responsibilities of each person/ entity entering into the agreement (Who will pay for what to include, but not limited to any down payment, holding costs such as Property Insurance Premiums, Utilities, HOA Fees if any, Rehab Materials, Contractor Labor, Loan Payments, etc.).

Does the HOA cover all utilities?

The basement is completely unfinished with just the utilities and foundation walls/cement floor.

My two cents is that you have more simplicity and the capital partner is better protected by utilizing that last one - the loan option. 

I'm not sure what AZ has incentive wise but in Los Angeles because there's a housing shortage there are some incentives that you can take advantage of like...CalHFA ADU Grant ProgramThe California Housing Finance Agency (CalHFA) offers grants up to $40,000 to cover pre-development costs such as architectural plans, permits, and utility connections.

If you are the most expensive rental in the area, what do the other units have (ie do they have laundry in the unit or is it shared and do they include utilities or not?). 

if you are a little bit more ambitious and wanna get going on your own, you would utilize what’s called a fixed and flip/hard money loan in order to finance the purchase price and renovation budget.

They even handle most maintenance and all utilities.