I will also eventually renovate other two units once tenants move out, so if work is done well, I am happy to use same contractor for additional work.

Very modest homes similar to this one and in this area rent for around $1500-$2000/week in the high season.We've started renovations by tearing out the kitchen and floors, opening up the kitchen and living room to make one large great room. 

Smaller communities share the same expenses as a larger community and therefor do not cash flow as well.

For example: The business plan may call for lower CoC in year 1 and 2 while renovating units but may be higher in year 3 through exit averaging greater than 10% CoC, or must the business plan call for 10% CoC on day one forward?

You are on the right track searching for a commercial policy since the property is larger than a 4 unit. 

The property is vacant and he told me that he would be willing to allow me to start renovating the property prior to closing so that by the time we close escrow the house will be all remodeled and ready to put back on the market.

Do contractors on Oahu typically need professional plans drawn for small house renovation jobs?

Depending on your budget to purchase and renovate, the BRRR technique may a route you want to strongly consider.

For example, if you have a person on the 3rd floor that cannot use the stairs and you have a vacant unit on the 1st floor, you may be required to relocate them to this unit during the renovations.

A hodge-podge of updates over 100+ years have left the houses with awkward spaces and outdated everything.The larger house is 1,625sqft duplex with a 3 bedroom unit on the first floor and 2 bedroom on the second floorThe small house is 1,150sqft duplex with 1 bedroom on the first floor and 1 bedroom on the second floorAsking price (FSBO) is around $240k for both (7 bedrooms total, 4 doors) but I'm fairly certain there is plenty of wiggle roomThese houses need *complete* remodels.