In 2019, 55% of military families living in on-base housing reported a negative view, according to a study conducted by a Non-Profit (see link here), while only 16% gave positive marks, with the rest remaining neutral, said an article by Reuters.

Personally, if an apartment complex doesn't cash flow, you probably want to look the other way, because that's how apartment complexes are valued--they are valued based on cash flow and rents.However, there are people who take advantage of a cashflow neutral or negative property (i.e. high vacancy, poor management, down units) that will be purchased as cashflow negative and quickly transitioned to cashflow positive.

When it comes to painting, we want to get rid of all the wallpaper and paint through a neutral gray tone that should match with any furniture we (and future tenants) decide.

Electrical is ungrounded as it was not required at the time the property was built.Typical for the age, most likely you have BX cables and can use the metal armor for grounding, so all you have to do is swap outlets and tie the neutral to the metal box.

Also, if the first duplex is negative or cash flow neutral for a couple years, will it be difficult to get a 2nd loan to purchase another duplex because of the debt to income ratio?  

Neutralizer is also essential, lay it on thick and probably cover with poly to make sure it soaks in vs evaporates.

You're better off starting with a $1M LA duplex and pursuing a $4M LA portfolio that's cashflow neutral than starting with a $1M out-of-state cashflowing property.

The fortunate thing in all of this, they really are neutral (they get paid whether the loan funds or not :-) Ideally I would start it off as legitimate learning effort and ask them what factors are influencing, because you really thought that it was most comparable to the house next door.

I suspect your property would start at about neutral cash flow.  

Light, neutral paint colors.