Renovating for highest possible appraisal

[Tony Otis]

I'm looking for some insight into how an appraisal will be conducted on a side by side duplex when I refinance after I renovate it. I'm purchasing it with a loan from my parents and I'm building the renovations into the loan from my parents. I'll live in one half and rent the other. I'd like to refinance with an 80% LTV loan after its fixed up, and ideally, I can pay off the loan from my parents (purchase price + rehab) with the new mortgage.

The biggest unknown at this point is what the appraisal will be.  And because of that, I'm having trouble deciding what extent I should go to on the rehab if I want my dollars to go as far as possible to both increase the appraisal and increase rents.

Basic numbers and facts:

Side by side duplex built in the late 1800s

4 bed / 1 bath per unit

High rent neighborhood 

~3000 square feet

Purchase price: $318,000

Bare minimum cosmetic updates and required electrical work: $60k

It'll appraise in the neighborhood of 440k-500+ after renovations depending on the types of upgrades I put in.  This window is far too large and I'm interested in optimizing so each dollar will increase the appraised value and rents as much as possible.
The duplex next door was flipped for 485k and has 3 bedroom 3 bathroom units.  This is my best comp to go off of.  There aren't many duplexes in the area with this many bedrooms.

Rents are $2200-2750 per unit depending on the upgrades I put in.  There's a lack of rental comps with this many bedrooms and $2200 is a conservative estimate.

I could sink an additional 50k to bring the total budget to $110k to increase rents toward $2750 a unit.  Its a lot harder to determine what it would appraise for though.

While I could list all the optional upgrades I could make, maybe it's more worth while to ask how the appraisal is going to work.  Will they just attempt to find comparable properties (which is near impossible for a side by side with this many bedrooms in this area), and adjust the price from there based on difference in number of bedrooms and bathrooms, square footage, etc?  Or will they appraise based on what rent I can get from the one unit and assume the other unit that I'm living in would rent for the same?

Appreciate any input,

Tony