That was my first reaction.

My first reaction would do a more elegant/stylish balustrade, which would IMMEDIATELY set your unit apart from all the others, since interiors are how you're competing. 

The contractor reports to me that there's cats everywhere, the place SMELLS like ammonia..... he even refused the job because he got a terrible allergic reaction and the place smelled too bad.....Other than annoying instances of having to wait for him to get us cheks a couple days late, he hasn't been a problem.....But I fear the place will have a permenant smell, and who knows what other pet damage there is.....Should I threaten eviction?

My initial reaction is that it's seems quite aggressive.   

I have finally let my family know of my intentions and their initial reaction was to put me down and say that my goal was unrealistic for someone as young as I am and that rental properties are so much work that I will not be able to handle it.

Agreed Levi T. my first reaction was the same, no way this is going anywhere.

That number seemed to be uncomfortably close to their current mortgage balance, based on their reactions.  

Anyways, our contractor was first going to tackle the water issues and then knock out every wall (which I would have requested anyways lol) as nearly every wall visibly had mold and I am highly allergic to mold.In fact, even though I suited up I'm now having to go see my eye and health doctors as my eyes weren't 100% corrected and now I'm having allergy issues due to doing just a quick walk-through.So while you may think it is a scam, people like me literally need to have the job done fully and at highest quality.

Worse, I'm allergic to tobacco cigarette smoke and passive tobacco tar isn't much better for me in terms of the allergic response it kicks off.

I then explained it to them and their reaction was interesting as I think they never actually worked through the numbers they were just trained to repeat that mantra.....*** NOTE *** After reading a few other responses, it seems that the suggestion was that if you were going to have the debt regardless, then pull some of it through the home to get the tax advantage.