Don't count out a home with one larger room, that you can add an exterior entrance to (cut in a door where a window is at present) and create a studio with kitchenette. 

Pull up the tack strips, run a magnet-on-wheels around the edges to find all those nails, then refinish. 

I also have contractors coming in to provide some much needed exterior updates. 

Renovation of the upstairs would take ~450k (including a new roof, AC in the cafe, fixing exterior brick etc.)

I found the appraisal from the foreclosure court records and the problem is the appraisal was done from exterior only and came in at $270k based on comps that we're finished.

That being said, I would be concerned about the occupancy and if the leases have a variable ending date and its age, and if you think you could add any value to it by raising the rents or make any interior or exterior improvements. 

I will do texture, paint exterior and interior myself, baseboards and trim. cabinet install possibly What should my asking price be you think?

Trick with any sales funnel is a having a good lead magnet or Item of value to entice buyer/seller/ lead to give you their contact information.

@Samuel Glantz only thing to consider would be the weather. if you have a lot of exterior work and the weather is cold, icy, wet or unsafe due to high winds that will impede what you can get done.

The home was built in 1974 and needs some exterior work (not the kind that adds value to renting).