Thanks for your reply Ryan.  Positive cashflow property is the eventual goal.  The issue is getting there ie getting the banks to lend me the money as I have very little equity or deposit.  I am just looking at a way of getting some equity from my PPOR as I see it I have 3 options.
1- Wait for capital growth (how long will this take)
2- Rent for a while to give myself more cashflow therefore being able to start creating positive cashflow property (wife not keen on this one)
3- Build and Sell after 12 months for a profit.

Your right about my wife. She'll get sick of it so I was hoping that if I could get 2 or 3 done then that would be enough to get the banks to look at me for another property to renovate.

I like the idea of converting places for dual occupancy is this common?

Also will banks take into account the proposed income from rent after renovating and will they lend based on this?  I'm assuming that they wouldn't?  If anyone can explain to me how this works it would be greatly apprieciated. 

Sorry about all the questions. Just trying to work out a way of getting into this.

Michael.