All in the Family Duplex

My wife and I are in the early stages of contemplating doing a duplex development with our daughter and her partner.
Our tentative plan is to buy a knockdown, do the development, move in and then after 12 months sell and do it all again or wait until there is sufficient equity in the first property (plus new savings) and do a further development as a pure IP. There is a clear understanding that once the first property is complete either party is free to make their own decisions re the next steps.
Some questions:
1. What is the best way to buy the knockdown?
2. Do we buy it jointly or does one party make the initial purchase and then do the subdivision?
3. What are the financial/legal implications?
4. Is 18 months a reasonable timeframe from acquisition to moving in?
Any help and or guidance would be greatly appreciated.
First thing I'd confirm is that you can buy a knock-down at a price that would allow you build and resell at a profit. You couldn't do so here. To bring the land component down, you must do a multi development here.

I had my parents living in a semidetached unit [not a granny] I added to the house I already owned and the arrangement was successful. Worth working on. Ignore those who say "Don't do it!"
This is a bit complicated because there are 4 parties involved here. Generally for developments between two parties who are not husband/wife etc I would recommend a unit trust structure where you are all unitholders and directors. This will contain the development in the trust and you may extract better control on the distribution of income and be more tax efficient. Also I think in NSW you can change ownership just by selling units in the trust to others without incurring stamp duty, but I am not 100% sure on that point.

Would definitely stay away from a tenants in common / joint tenants ownership structure because it is not good for a commercial, business transaction, even if it involves family.

The only financial implications I see is that as director/unitholder all of you will be jointly and severally liable for any loan you get to purchase. While not a problem per se, it can affect each person's borrowing power for other properties that they want to purchase. Think it through very carefully and talk it through with your lawyer/mortgage broker/accountant.
You could read Sheryn's thread which was a similar situation where she and hubby built a duplex with their daughter and then split the title with a deed of partition - which can be used with family. The info begins at Post 55 in the thread. Send her a PM if you want more info. I will email her alerting her to your post.

Agree with Aaron, always consult your professional team for advice. :)