This is often easier in lower tier markets where the appraisals are not indicative of how the property would sell in an arms length transaction.The other risk you run is over extension.

In no way is Seller forced to fix it just because a home inspector calls it out.

House-hacking by room is a topic that pops up when we're late in the real estate cycle; in tier 1 areas multifamilies available are scarce or priced unreasonably so one is 'forced' to rent rooms instead of multifamilies.Things to consider:1) Exit strategy - are you forced to live on site and manage it? 

I honestly believe a lot of investors are being forced to buy properties that cash flow less per unit but then one big expense and you’re in trouble.

That means either you won't cash flow or your Return on Equity (ROE) will be terrible.Since this is your primary residence you'll be exempted from paying capital gains taxes when you sell.If you sell to your parents, it will be considered a non-arms length transaction and will get closer scrutiny.

Or will I be forced to pay to de-convert the unit before I can do any other renovations?

Forcing appreciation is possible, but you must be very strategic about how you renovate.

I flipped a condo in Washington DC and used the forced equity to purchase a buy, renovate, and hold property in Richmond.

SEC steps in and shuts it down and freezes everything and forces liquidation and the investors are wiped out..

Without substantial renovation or repair / forced equity, I doubt that since almost 12 months ago you have enough to do a DSCR cash out refi.