My question is why you want to bring it up to code, other than just to feel good or improve your exit strategy?

Proceeds to segregated account to be disbursed ONLY on rental property improvements and expenses to preserve the deductibility of interest on your Schedule E.

My strategy would then be to lease at least two of the renovated units, increasing occupancy to 90%, which could improve the chances of securing favorable terms for refinancing.I haven't pitched it to the seller yet.

My suggestion to improve your cash flow is to find another bank/lender.

Investing in your self improvement is wonderful most people do not have the mindset for growth.   

Property ClassProperties are categorized by class, impacting their quality, condition, and investment profile:Class A: High-end, newly built, prime locations, attractive to institutional investors.Class B: Good quality, older than Class A, with minor deferred maintenance.Class C: Older properties with dated amenities, but value-add opportunities exist.Class D: Distressed properties in less desirable locations with high risks but potential for significant improvement.4.

University of Kentucky and Lexington-Fayette Urban County Government Land Swap: In 2018, the University of Kentucky exchanged 250 acres near its Coldstream Research Campus for control of several important roads in and around campus, contributing to economic development opportunities and improved urban planning. 

Very simply, large corporations pay into the tax base of that local community and that revenue is used to improve the community and make it a more attractive place for people to live.

I apologized and said (and truly meant) I'd follow up on it and improve for the future.

Everyone thinks they can paint but there's a big difference between a professional paint job and a non-professional one (the latter usually actually damages the property instead of improving it).