Then I had another one where the buyer brought as is under the impression that legalizing would be easy and found out it was not ever allowed and a portion of the structure had to be demolished because it was built horribly and a hazard as built.  

A friend of mine had a client who successfully partnered with a regional claims adjuster, and it brought consistent bookings for months.2.

They brought in mice, cockroaches, and spiders.

It will be expensive as you'll need a meter socket, weatherhead, breaker box/load center in the unit and then all the circuits in unit three will need to be disconnected from the present box they go to and brought into the new load center.

The only reason I brought up that I coach in a comment was because I disagree with Henry's approach based on significant experience.

No attempts to "pull one over" on anyone here--in fact this deal and partnership idea were brought to me by the other would-be investors (including the deal finder), because they're interested in making it possible for my wife and I to move closer to them (currently living in different states).

And @Kory Reynolds brought up a good point about recapture of the section 179 deduction if your business use drops under 50% in a future year. 

Details on the duplex:Price: $385kBuilt: 2012Size: 2674 sq ft (1333 each side). 2 story, 3B/2.5B each side w/ 1 car garage & driveway for both, fenced backyard both sides.Interest: 5.49%PITI: $2,698Current Rent: $1,350 but could be brought up to ~$1,600, maybe $1,700Yearly Property Tax: $8,340 (I don't pay any on my side while I live there so $4,170)Upgrades: Vinyl floor in kitchen of both units, new AC (central HVAC) on vacant unit, roof done 2016. 

The fact you brought this up on this board with this situation tells me that you are fairly new to renting by the room.  

When I brought up the cleaning fee he threatened to just leave once the end of the month was up and he'd have his gf clean for free which has not happened to this point already.