I live in California, this is a bay area property.were not looking to move out of state and house hacking is less palatable when a duplex costs 1.6 million.

Focus on tax-saving strategies such as cost segregation studies and bonus depreciation to accelerate deductions.By qualifying as a Real Estate Professional (spending 750+ hours annually and materially participating), you can offset your wife’s S-Corp income with real estate losses, reducing your tax liability.

I don't expect to know everything by then, but I hope to develop a basic strategy that prevents me from making the most common and costly mistakes that a newbie can make.

If you can rent it for $2,000/month, after fees, taxes, and potential maintenance costs, you’d still make a decent passive income.

My thinking is that by renting to a residential care facility I can effectively utilize all the space, earn above market rent, and help provide a needed service, while avoiding tenant parking jams. 

Here's a big "math" you overlooked for quite a few years.Right now $388k in equity, minus (let's go all out) $100k in closing costs, gets you a walk away of $288k in equity.Use that $288k as a 20% DP, and you should have $1.44M in property value,...not $415k. 

If you have not heard of the Dunning Kruger effect, look it up.

The reason not to upgrade, is that you won't get that much more income for the cost of the upgrades.  

If a prop is 250k and you can refi at 70% LTV you want to get it at 175k minus rehab costs.

A good landlord understands that vacancies & Rent-Ready costs will destroy your cashflow and profits.