I always make sure that the properties are cash flow positive, but the large bulk of the money I make from them is from the other items (appreciation, debt paydown, tax benefits, etc). 

Are there additional factors you think are worth considering?

Additionally, in the R-7 and R-8 Zoning Districts, you need a Conditional Use Ordinance from the City Council to authorize the conversion.

Your 1031 will have to be for the net selling price, not just the amount you clear after paying off any debt. 

It is currently a glorified finished attic with little room- Use addition and raise it up and extend it to the side of the home for more finished space and room for deck, washer/dryer room etc- Make the living space as functional as possible with the added sqft- Add outside living structures like deckThis is a fairly wealthily area and I want to maximize my ROIWhat are some things you recommend for a large scale project like this and what are some hurdles ?

We have not disabled ours or converted to gas, but Tenant must sign a Fireplace Addendum stating if they use it, we require a higher renter's liability policy with us as additional insured, rules on wood, storage, use, safety, they pay for yearly professional cleaning each year they are there, etc.  

The other option I potentially see is to partner with someone that has cash and/or better debt/income ratios and partner on the next purchase.

We didn't need to rehab except for a couple units when they became empty and we used cash flow (so no additional capital needed).The rents are now $10,700/mo and we are cash flowing well. 

In addition to down payment you need reserves which is 12 times or 24 multiplied by all you debt.

I want to refurbish the entire house, including a complete kitchen and baths renovation, add an addition on the east side, new roof and siding, new flooring everywhere, paint inside and out"Then ask the GC to go over and put this into a more formal document.