If there is a leak in the roof it is in your best interest to repair it   I guess cosmetic repairs can be delayed as long as it doesn't impact the habitability of the property.  

But you wont have a list of cosmetic issues or maintenance issues, you won't know the cost to replace/repair or even if its required.

I do have another separate cushion for emergency and/or operating expenses so I'm more curious about renovations for a light fixup with cosmetic issues. 

We did cosmetic work in the Kitchen where we added a large backsplash, swapped out the sink and updated the counters to some affordable but beautiful butcher-block and cement counters.

The SFR also allows a newbie to defer some routine maintenance headaches (lawn care and direct handling of utilities) onto the tenant.Appreciation isn't a driver on $60k homes, so you can't really own "rentals" in this area without wanting to be a cash flow investor.Acquisition cost is an expense on all transactions and is an upfront expense not an "overhead" expense.

I would buy a turnkey or cosmetic rehab with built-in equity and then refinance at 80% LTV and pay back the original $30k.

If I can, the plan would be to take a 5% conventional owner-occupied loan for the multi-family, house-hack by living in a unit and renting out the rest and maybe polish up the cosmetics (not spend much, since I won't be getting it back except through a potential minor rent increase).

As for insurance, you should discuss with an agent who routinely does commercial property insurance. 

We used this time to do cosmetic repairs and updates.

I hear some areas of NJ routinely transfer properties with UST's, but normally it my area its a red flag.