No, there shouldn't be a rooster at the property that attacks the appraiser, and yes the utilities should be on and functional when the appraiser shows up.

@Francis Morris, I like the following sites for market metrics like the one's you mentioned:Berkadia.comMarcus and MillichapCBRECensus.gov (specifically factfinder.census.gov and utilizing the guided search feature)The Marcus/Millichap and CBRE also have a property search feature where you can look at OM's for listed properties.  

What system(s) are being utilized to manage these opportunities? 

If you can negotiate the right combination of property price, term of option, and consideration payment you will give the seller, you now have the luxury to utilize the 'time' you have bought with the option to find the highest and best use for the property.So why give up a non-refundable consideration to the seller, when there are those that simply negotiate a $500 or so refundable deposit on a straight purchase and sale agreement? 

Real Estate Note Investing by @Dave Van Horn: How to borrow smarter and use every form of leverage you have availableThe best methods to raise money by understanding and appealing to private investorsCreative ways to squeeze more profits out of deals by utilizing multiple financing strategiesHow to scale your investing through a passive investment vehicle that is backed by hard real estate without the tenants, termites, or toiletsFREE Bonus Chapter: “Where to Find Notes”FREE Bonus e-book: "Stay Safe!

However, I do not much about renters/owners agreement on paying utilities...

How do I estimate the cost of Utilities?

I've been leaning that direction purely because I have a small HELOC as part of a loan too so by selling I can utilize the 50K difference toward a multi-family dwelling instead.

The strategy would work  better if it were your primary residence, but it becomes more difficult if you're trying to convert a SFH to a true two-tenant duplex.1) You'd must likely be violating zoning (Unless area was zoned MF), so you'd have to hope the conversion flies under the radar.2) Utilities is the biggest hurdle, as a SFH only has one water, electric, and gas meter.

That being said, $3750 is the new qualifying income, minus $1250 for rent, minus $200 for utilities, minus $150 for Phones and TV, minus $1000 for two expensive vehicles.