This will identify major issues with the property and give you an idea of any large capital expenditures needed and maybe give you some negotiation leverage.

I want to convert my current residence into a SFR and look into buying a duplex to implement house hacking and reduce monthly expenditures while also getting into another property.

Can you share the age of the property and what you are modeling for capital expenditures?

Do you also have money set aside for major expenditures on the house? 

WE need affordable housing with all the mandates but the cities counties are forever changing the rules and not making it easier or cheaper every change requires something more  more expenditures of capital to get to the same place.. affordable housing biggest Oxymoron in all of Real Estate..

As a landlord, I do have to set aside a quite substantial reserve amount for capital expenditures, and it would be great if there is a way to have those funds counted as a deductible expense. 

Class A provides investors with more security by knowing that they are investing in top tier properties, with little or no outstanding issues requiring further capital expenditures.

This breaks up my rents and expenditures for me.

Not the purchase price.As an underwriter, typically you would model a potential acquisition using LTV on stabilized assets or properties that do not require significant improvements.This is because capital expenditure costs will typically not be financed by the lender.

@Trisha KirbyYou will go from 1 property to essentially 3 so your cost of maintenance, capital expenditures etc is not includedAlso you will never have 100% occupancy at all times so that needs to be taken into considerationI would also have a property managerLast but not least you did not include your closing costs etc.