Will the quality of flooring be the determining factor in someone making an offer on the house?  

drive the area that the duplex is in at night.

income, revenue to the state/county, these properties are less likely to be eye sores and can/will help drive up property values for neighbors (catch 22 here)...etc.i live in rural area on Maui and have seen my share of legal and illegal VRs pop up...i don't really have a dog in this fight either way, but would probably like to dabble in this market as well should the rules/laws change...right now the process here on Maui is just too cumbersome (probably that way to make it unattractive) to become a legal VR property.I do wish you luck and ask that you post back with your findings/results for the other Hawaii folks!

Also drive around your city and look for new builds, talk to the crews and contractors there ask them if they know anyone.. if you have a couple extra coffee's in the truck I'm sure they will take 5 minutes to have a cup and answer a couple questions.

Cost approach is a different subject matter and...I think the owners are factoring rehab into their asking price?

@Alex Tobias as I mentioned, I bid on deals after looking at detailed financials, but you also need to factor in reality.

Median home values generally increased in high-cost areas in 2017, driving up the maximum loan limits in many areas.

The municipal property assessment is based on a mass appraisal model and does not take into consideration a large number of significant factors that can affect the market value, like condition of the property for example.

After you factor in maintenance, than might drop to $0, with the tenant only paying off your mortgage as a return.Keep reading the blogs and forums on BP and you'll see a lot of references to the 1% rule, which means the rent received each month should be at least 1% of the purchase price of the home. 

They could also agree to pay all your closing costs from their proceeds, so you have no down payment and no closing costs......Sign and drive so to speak.