Or will the bank statements reveal other issues?

First of all the inspection never reveals hidden flaws in an occupied house.

The property is a duplex for $290k and the owner revealed that the rear 1bdrm as an illegal unit, so it's being classified as a 3bd/2bath single family.

A good inspection should reveal most issues, but the ones hidden in the walls will still surprise you.If you are planning a major remodel, this may be a good opportunity for you as you can "make duplexes great again". 

The last three properties I have purchased were all done initially based on pictures with an inspection/walkthrough. 2 of the 3 properties that I purchased, I negotiated again after the inspection revealed some issues.

The work was finishing up there at about the same time that the problems were revealing themselves on the first side, so I had the tenants move to the second side to allow for the kitchen and bath to be repaired on the first side.

NAR SOP 1-9Realtors shall not1) reveal confidential information of clients; or2) use confidential information of clients to the disadvantage of clients; or3) use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless:a) clients consent after full disclosure; orb) REALTORS® are required by court order; orc) it is the intention of a client to commit a crime and the information is necessary to prevent the crime; ord) it is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct.Information concerning latent material defects is not considered confidential information under this Code of Ethics.

Some will post on this forum trying to find closing/escrow companies who can double-close without revealing the real prices to either party.It's been fascinating watching the bar lower further and further here in Columbus as our market gets crazy hot. 

He had more than sufficient income to rent the place, however he was the one that broke the news and didn't reveal whether or not he lost his job. 

The agent must not reveal any confidential information to the seller and will continue to be the seller's fiduciary.