They will want make sure the utilities/depreciation/etc are separated between your living area and the tenant area. 

While searching for multi families to house hack came across this one but the realtor says the 2 apartments are actually separate and therefore not considered a 2 family home.

The house alone would sell for around 150-160k if I subdivided the land and sold it separately.

Purchase price: $120,000 (includes extra lot which will be separated for future development)Estimated Rehab Costs: ~$120,000 Estimated Sale Price: $365,000Estimated Profit: $80,000 (after sale costs and holding costs)Fix and Flip ongoing

For a larger portfolio of conventional assets, it is best to do that in a separate IRA.

Everything I've seen on island with the potential to have a mother-in-law/back cottage/separate rental property seems to be the million dollar properties, at least east of Waipahu.

The reason is management of large properties requires serious expertise, talent and it’s a completely separate and different business. 

You'll want to verify things such as separate water meters so make sure you account for that. 

Could get more if updated and has the potential to be subdivided one day into 2 separate 1BR apartments because it's huge.Gross Monthly RentsAt closing - $1450After stabilization - $2420After I move out - ~$3700ARV - ~400k.

If your duplex has separate meters, then the tenant should have the utilities in their own name.