Fear does not keep me from buying right smack in the middle of the urban core if I think the numbers make sense.

They will have normal operating expenses, but they should also have a reserve fund for repairs. 

Does this amount paid to decrease mortgage consider against capital or against operation profit?

At its core, there is no difference between a turnkey property & any other property.

The 25% down payment is no problem for a conventional loan, but until it is occupied and operating well, I wanted to reach out to the BP Community to see what other expenses I need to account for right from the start until it's occupied.

I'm not a lawyer or an expert in asset protection so we'll just say that we're officially out of my depth on that topic :)It sounds like you've done very well so far, why not just keep doing what you've been doing, while leveraging experts to improve your business operations?

When evaluating a property, do you subtract Capex reserves from your operating cash flow when calculating cash on cash returns?

Yeah, I guess it isn't any different from what anyone who operates a normal business such as a Dominos franchise has to deal with.

Many are well represented by sellers & turnkey operators here on BiggerPockets.

You need to have a really strong operating agreement.