If its an occupied property you need to factor in eviction costs/time and you will likely have no interior access so rehab costs are a complete unknown.

I found a house for sale by owner like the interior remodeling. overlooked the damage caused by the foundation issues existed.

If updating the interior or exterior will allow you to increase rent and get paid back in "x" number of months, I would do it.On the other hand if you have good solid tenants I wouldn't mess with anything.Since your grandfather had these for 20 years some of the tenants may be due for a rate increase without any improvments

The interior doesn't look like it has major damages as in the walls are intact, a bit dirty, so needs some repainting.

My wife and mom painted the interior of the house.

It's my understanding that if your property is pre-1978 and you're disturbing x sq ft of area (think it's 6 for interior or 20 for exterior), then you must be lead certified or use lead certified contractors if you're reselling or renting, may be exempt for owner-occupied, unless your state offers another option, like a lead-free certificate after professional testing. 

Also think about a really loud interior activated motion activated siren set outside the unit. 

Tenant maintains the interior and lawn.

I’m going to do most of the interior work.

@Hadar Orkibi, to give more insight on the $1.4M and rents that Ben mentioned: We're spending $7,300/unit on upgrading the interiors, so touching almost everything.