But chances are a 40 year old home is going to have issues with plumbing, electrical, insulation, roof, HVAC, wiring, drainage, etc.

One of my rental units had it in the closet and one of the lines going to the unit was not insulated and was dropping condensing water on to the sheet rock slowly.  

When you have to follow code and have insulation wiring and plumbing all a certain way it makes it much easier to build a box designed around your plans, than plan a build around a bunch of small cheap boxes.

They are less efficient, but you can use the plastic window insulation and it's hardly visible and works almost as well as a double-pane window.Water damage was found with thermal imaging?

Noise can be a factor is not properly insulated in between floors.  

If advertised as 1600 feet which includes the 150+ of garage then the seller lied.I'm assuming the conversion appears to code, is insulated and electrical looks professional. 

Sure, you could get a PM but that doesn't insulate you from turnover/vacancy or systems and appliances having to be replaced. 

New plumbing, electrical, insulation, sheetrock, paint, finishes.

Have you looked at the insulation of the buildings? 

The LVP is more of an insulator than tile.