The unit that is not updated, I've already done significant upgrades like flooring, new trim, doors, appliances and current tenant accepted my increase to $850/MO.

Sure, house hacking is finding a house that can reasonably divided into two areas allowing you to sublet one side or one floor of the house while also allowing you to live there. 

I would be living on one floor and renting out 2 bedroom on the second floor (they would have to share a bath.)

Knowing where to take financial shortcuts (floors) and where to invest (fireplaces).

@Varun HegdeIf you have to give title policy at payoff I would absolutely have the seller provide one to you at saleWhat if there was something that was not picked up in the past that causes you to it be able to transfer clean title.

Title, appraisal, recording, insurance fees have the same floor of minimum costs.

Modern floor plans, modern mechanical systems, well insulated, generally separately metered etc.

Porch floor, painted foundation exterior, bathroom ceiling.

These are low rise, 3 floor buildings. 

But since I am wanting to provide substantial services, laundry, meals, cleaning, it looks like I do not even have the option of reporting on Schedule E.