Effectively turning a duplex into a triplex.Does anyone know if there is any issue with doing this?

I also find that often times when people consider this, the home isn't well suited (too small, not enough bedrooms, not single story).

Not sure if this option for commercial STR coverage is common knowledge among State Farm agents. 

What would a taxation model look like in this scenario?

This allows you to meet the material participation requirements based on your combined activities across all the grouped properties.But yes, RE Pros still have to spend over 750 hours in real estate activities during the year (and more time doing this than anything else) to be considered material.

Quote from @Vincenzo Peter Manzella: This is why landlords or managers should inspect every property at least once a year.

I think this will be a decent deal.

You bought this with only $30,000 ??????

i This particular PM and property I have had for two years.  

John this is great advice, thank you!