I'm sure Philly is awesome, just making sure you've already learned about what's right under your nose first before you leave it...

Even then, due diligence means they may walk away - no skin off my nose, though.  

I would say it might be better to sound insulate the ceiling if you have any doubts because it keeps your nose down for both your tenets and yourself; also  you most likely be forced to tear down the ceiling drywall and replace it with fireproof/fire barrier drywall and installation because the city most likely might force you to add fire separation since it is now going to be a multifamily.

Don't chop off your nose to spite your face. 

I've had very good luck following my nose in when to rent to people with subpar specs, and will probably rent to them after I get their application package and run credit.

The next one just needed to put some stair nose on (which I provided).

They turn their nose up at it, which makes no sense to me.  

Always make sure to subcontract any work related with the units (i.e. hire a cleaning person) and try not to provide breakfast, as this will turn the activity into ordinary instead of passive.For a multifamily, as long as 80% of the units are rented on a long-term basis, then the income is considered passive, hence no SE tax involved. 

If you choose to pocket the check instead of fixing the damage, it's no skin off their nose.  

That, coupled with the extra carrying costs means our profit now is more like $60k, which is a far cry from the $150k we thought we would get.So we're taking this one on the nose a little bit.