I have a prospective client in Sunnyside who hired his handywoman to convert an existing garage to a loft-style studio with a composting toilet.

It also has loose/damaged siding, security bars on windows that need to be removed, earth-to-wood contact in the foundation and siding, leaks in sinks, windows that don't stay open, loose toilets.

Have a kitchen remodel I'm planning on my personal residence as well as having an egress window cut out for a bedroom addition.

UNLESS I remodel the kitchens and baths and charge higher rents.

Roof, hot water tank, furnace, leaky toilets. 

. $5,000 doesn't go very far in a remodel if any systems or appliances get involved.  

Here are my current options (beware, some of these may not make sense – this is my first time so I don’t know the difference between smart/stupid moves yet):A) Get property appraised and get a HELOC to use as a down payment for a property with FHA loan (2-4 Unit)B) Hope home value increases and sell when the equity >= a down payment on a 2-4 unitC) Remodel property and sell when the equity >= a down payment on a 2-4 unitD) Remodel property, Get property appraised and get a HELOC to use as a down payment for a property with FHA loan (2-4 Unit)E) Save money and wait until market rent >= cashflow, use HELOC/saved money as down payment for 2-4 unitI’m thinking option E is the wisest move but I want some other opinions to see if there's a faster way – any insight is helpful since I’m just learning.

But I hear there are benefits (tax & ...)to keeping some parts to declare it as a remodel to city/state. 

It has been proven to me over many years that is a dark and dangerous road.In our leases, it states that if the maintenance issue (lets use clogged toilet or sewer main) is a result of normal wear/tear or lack of owner maintenance, the charge rightfully belongs to the owner.However, if the tech pulls out a toothbrush or Barney the Dinosaur out of the drain, the full charge belongs to the tenant. 

My friend has been offered by school administration to place students there 400 a door shared kitchen and bathroom also completely remodeled.