The lender won’t escrow repairs having to do with wood rot and roof issues.

While you may not be able to directly prevent them from vaping, if there is damage caused by it your lease will have you covered.

We knew we would make a good chunk of money off selling our first home, therefore we wanted to put that profit towards upgrading some things on our new house (metal roof, hardy siding, etc.)

Based on your posting the damage seems to be extensive, especially since it’s affecting the structure of the home such as a floor beam, sill plate and subfloors.It appears there is active termites as well as a beetle issue and both must be resolved before repairs can de done.You didn’t mention home value, just purchase price so it’s difficult to say what to do from this point.At a minimum, I would have the termites and beetles dealt with and get a bond from the termite company to cover the first year for more treatment.Also, have a licensed contractor give you a repair estimate.

I am purchasing at $150k cash and will need to do some cosmetic renovation as well as new roof and hvac system.

You can also buy properties that a bank wouldn't give a mortgage on, say I could with a really bad roof. 

You could require that the property must appraise for at least 148K and that you will cover the difference above that. 

It also needs all new windows (22 with most of them being about 19x63) a complete kitchen, full bath, another bathroom added, a roof, full a/c system and all new plumbing.

I was wondering if it is realistic to get one where the cashflow from 2 units covers the mortgage principal and interest?

One caveat is how was the roof/property marketed?