In Milwaukee, I'd need 2 exits from the attic and 50% of the space has to have at least a 7 foot height on ceilings.Two things you want to check: both requirements are correct, but on top of that the city is getting reluctant permitting 3rd units: 50% more occupants mean 50% more water and sewer and 50% more traffic and parking.The other issue is that the cost of finishing a thrid floor with proper insulation/ventilation will run about $50-60/sf and only makes sense if you can get strong rents. 

I have personally seen subs who specialize in storm water management systems as well if that's something that is necessary.

We usually cut a permanent dryer vent in the wall and use that to exhaust it to the outside (instead of hanging a hose out the window, yikes again).If you don't have forced air in a property (meaning if you have hot water radiators) a mini-split system is one of the most cost-effective ways to cool a house.

I would agree with Livia that a tub is more luxurious, but not at the expense of a great walk-in shower, large double vanity, stand alone water closet, etc.How much is your budget?

The place is overgrown and currently not liveable but is on a town road and has water/electric/sewer.

. $45k from several unexpected large repairs (water leaks, roof collapse, siding rot, plumbing main line, etc.)These issues are also causing me to rethink the assumptions in my model, increasing my vacancy rate from 8% to 12%, repairs from 5% to 20%, and capex from 5% to 20%.

This allows you to test the waters without committing entirely to unfamiliar territory.Local Expertise: Leveraging the knowledge of local experts is invaluable.

This slowed the water down but did not fix it.

Quote from @Zachary Luchs: I am merely just testing the waters to see where everyone is investing.

Will they respect their obligations when they move out or will they stick you with a large bill for unpaid water bills, damages beyond the deposit and extraordinary cleanup expenses?