I recommend educating yourself as best you can to avoid some common mistakes.

Rent on a 4 bedroom place may be $5000 monthly ($12,000 in Manhattan); rent it by the bedroom for $1500 per bedroom with access to all common areas.  

Make sure everyone knows a cleaning schedule, expectation for common areas, how are you splitting utilities, guest policy, etc. 

Lease provisions in one place that are common and acceptable may not be allowed elsewhere.Overall its worked out for us but there's definitely some potential pitfalls.

The primary form of diligence we see on the forums is "what do you think of XYZ sponsor and deal" whereas the common form of diligence in the space by institutional investors, large investment groups, family offices, and sophisticated investors involves following the sponsor for years, underwriting the deals, validating rent comps, background checks on the general partners, and a host of other diligence that materially de-risks the investments.  

.- Getting under contract and then reducing the price because of findings is common, but major reductions are likely to tick off the seller unless you have strong justification.

(In the simple / non complicated scenario)- time ranges - in the best / simple case scenario how long should I expect this process to take? 

This is a situation where you need to run a few scenarios and see how the numbers shake out. 

Will the capital gains in this scenario be considered passive income from an IRS perspective ?

But usually for a tenant occupied it's like $90-120 per monthI've noticed a lot of multi-family buildings are pre-WWII housing inventory - are there restrictions or issues common with that (historic districts, crazy high utility costs, etc)?