Brush up on building code requirements: in basements you're looking for egress windows that are 5.7 sq feet or more openable (3ft by 3ft casement style windows work best), and ceiling heights 6ft 8 inches or greater (as little as 6 ft 4 inches is ok under ductwork and beams though)2.

There is forced hot air in the house now, so the duct work is there.

So far we have replaced the ductwork and have had some closets built in. 

Or should I cut all of it out and ha e furnace installed with duct work?  

Back in those days asbestos was barely new to the market and was used for many things such as siding, plaster walls, insulation, duct work and even shingles.

I had a 2/1 , 934 square feet, and had a whole new system including duct work replaced for 3k but that was back in 2009. 

I am installing HVAC into all 4 and the quotes I got for all units together was $18,500 - 20,000 ( or about $5000/unit including units and ductwork for 1300-1400 sf each)   They are running all of the ductwork through the rafters upstairs and in the basement apartments - I assume they will install in the ceiling somehow - They will not have to do anything to the slab (I know because I just spent a ton to replace the sewer line and put water, plumbing, and electric for the islands into the slab.) 

I am looking for a HVAC installer to do ductwork, heat, and AC in a Chicago 2 flat in Rogers Park. 

But you are paying for the convenience of easy duct work. 

Thanks city of Milwaukee, another 10k price drop to accommodate new hvac, going from the boiler system to forced air.All in all the work done to the property included:27 new windows2 new furnaces, ductwork and water heatersNew PEX plumbing along with accompanying fixturesDrywall work and insulation to remedy water damageNew roof (6 layer tear off)Refinished hardwood floorsNew cabinets, countertops, etcGutted bathroomsPaint abound Etc, etc, etcBeing the largest project I have undertaken, I ate two months of holding costs in getting the property ready for rent as I grossly underestimated the amount of time it would take to get the property ready.