E.g. if there is a broken window, an appraiser for DSCR, Conventional, FHA, etc... may name the appraisal value as "subject to" the repair being made.  

If the "improved the property" was something like a new roof, or a new furnace, then those long term upgrades get added to the basis of the house and then must get depreciated over many years.

Would an LLC with the partnership shares broken out be the way to go or is there another way to structure it?

They have had windows replaced, electric upgrades and other nifty fixes done by previous owners.The older homes often have much nicer yards and are often really strongly built.

My mortgage is very low and I have just remodeled the kitchen and remaining upgrades will cost less than $5k.

However, we had another issue saying that bathroom sink stopper is broken and I need to buy a new faucet (or a completely new sink- she would enjoy) with the back part that drains the water slowly.

The home was not insured for replacement cost, but we managed to have it rebuilt with the necessary upgrades.

Adding units usually means upgrading to sprinkler lines. 

If the original broken faucet was very expensive then perhaps not.

We're interested in small B/C class multifamily properties (2-4 units) in the $200-$325k price range that has potential to reach 10% COC, with special interest in exploring hidden value opportunities via renovations/upgrades.