Usually for first timers and low down buyers the underwriting is a little more simplistic than traditional buy/hold investors purely seeking yield. 

I see investors selling for $100k-$125k above purchase with full kitchen, baths, flooring, paint, etc rehabs.

They don't trust the door-opener agent to handle the transaction because they aren't experienced agents, they usually just got their license recently or are part-timers without experience and closing skills.

I am a first-time real estate investor looking to make my first deal by the end of the year!

I gutted it and added new drywall, new light fixtures, new bathrooms, new paint, new kitchen, new furniture and new flooring and new windows.

The property is being modernized with brand new floros, kitchens and bathroom, windows are being added.

I assume you are probably losing a few of those bedrooms for living rooms, kitchens,  hallways, stairways etc. if converted from 2 to 3 units.  

Not adding any additional living space, just dividing the two units, putting a kitchen in one of them, and probably not having to add a bathroom to either unit.  

Add to the kitchen!

New HVAC, plumbing, electrical, floors, kitchen, baths & added a deck.