@Christian Orellana, It's a great transitional strategy that will reduce your work load greatly. 

Tried to go with Fire and Personal Liability (removing Wind and Hail) to reduce cost but haven't found any offerings.I wonder if other landlords/investors have some good strategies to tackle this challenging environment.

Policies like rent control, zoning restrictions, high taxes, lengthy permitting processes, and more reduce housing supply.

I wanted to get the opinion of others on what the best strategy is to deploy capital back into the properties to in order to reduce our taxable income while also continuing to build wealth.

It yields a higher quality clientele reducing the risk and these areas typically appreciate better over time. 

I’m looking to learn and grow and even shadow someone to get the ins and outs of real estate.

In our market converting a SFH into a duplex (if even possible) can reduce the ARV.

But you can still optimize portfolio performance while still reducing risk.  

That will kill what is on the surface and having it damp will reduce what gets in the air while you remove the drywall (with proper protection-completely suited up). 

Your rough math shows a 7.5% ROI, which can be improved by increasing rent over time or reducing costs.