@Arwin Nassiri for condo hotels ypu have to pay every time they replace furniture to suit the new style or image, not to mention wear and tear.

I'm glad you brought this up because these kind of issues of wear and tear on  electrical, Hvac, plumbing, etc are not necessarily structural. 

you are kind of dealing with three diffrent issues here, the thing about not being a legal three unit, super easy don't buy something that's not legal, and your agent really shouldn't be encouring you to break the law, the issues with properties being beat up, the vast majority of multi unit's that sell have some wear & tear that's often the reason for selling, being a tired landlord, if you want turn key, you are proably looking more single family homes or paying big dollars for a turn key multi if it even exists in your market, 3rd we can debate the pro's or con's of this this market but youve hired and agent and 99% of agents are going to tell you its a great time to buy, i'm usually more measured but that's because I have a deep psychological problem in which I care more about being intellectually honest than making money, most agent's however are not afflicted with this disease so your gonna have to make this decision for yourself before you hire any agent.

I've encountered several situations where tenants not only broke their lease but also caused damages, sometimes even leaving before the lease ended with damages behind.To clarify, when I mention damages, I'm not talking about normal wear and tear but rather significant repairs costing between $5,000 to $8,000, which don't qualify as vandalism for insurance purposes.In the past, property managers I've spoken to have often discouraged pursuing tenants for these damages, citing it as not worth the effort.Here are my questions for you:- Would you pursue the tenant?

Because I saw demand increasing, I decided to seize the opportunity by improving my properties (I went on a tear of cosmetic rehabs, and now my properties are the best in their class, which is allowing me to maximize my rents further and capitalize on the demand)...but, meanwhile, all we hear from the large multifam operators is that their rents are decreasing (I've also seen repots that large multifam supply is becoming over-saturated in some markets)...So, rents increasing in single fam/small multifam, and rents decreasing in large multifam--is that the dynamic folks are seeing in their markets? 

General contractor in business for 40+ years with an opportunity to acquire someone else's unfinished rehab for ~$2M with an ARV of $4M - $6M depending on whether we finish the existing project or tear down and start over with a better design. 

More wear and tear to my property too.

DC at times may make you tear things out that were not permitted either.

They will often tear up the house, not pay their portion of the rent or utilities.

There is a reason high value hotels constantly invest in upgrades and redesign, as well as high quality furnishings that can take the wear and tear of high volume usage.