If you do decide to go the business plan route, reach out to me as I have extensive market research for PM that may be of good use to you. 

After the variance is approved, you will need to get a building permit which may require plans review if it's an extensive addition.

I made offers much lower than that when the repairs are extensive. 

These guys are RE investor tax preparer with extensive knowledge.

The repairs seem extensive including bad insulation, minor roof repairs, faulty structure, floors are uneven (home is a little over 100 years old) galvanized pipes, old water heaters, among other among issues. 

Now we're in a breach of contract, with only $3,500 deposit at stake on a $333,500 package.Gave an extension of 2 weeks to hammer out some type of deal agreeable to all parties involved.Cut 2 properties from the package ($160,000),  Buyers came back with half-down and Seller agreed to finance the other half for 1 year with guaranteed monthly income.The Buyers will have enough time to finish repairs, get all units occupied, obtain permanent financing, and everyone comes out a winner.Hard to make up 7 months of your life.

TOOLS REQUIRED-Post hole digger, long handled pointed shovel, baulk-line, measurement tape, power tool with plastic cutting blade, extension cords, concrete combination tub, 4' level.

The issue of whether the rental of property is a trade or business of a taxpayer is ultimately one of fact in which the scope of a taxpayer’s activities, either personally or through agents, in connection with the property, are so extensive as to rise to the stature of a trade or business.

All showings have been pre-screened fairly extensively.  

The real answer is it depends on the intended use of the property, how extensive the renos are, and what your risk tolerance is.