However, that requires us to dig down the basement floor to meet the ceiling height requirement (it's got the egresses and 2 exits already), and I think that can easily cost us $100-120k.

On top of that the tall ceiling height on the 1st floor presented a great open floor plan concept.

You need some sort of tile or waterproof sheets going up the walls to the ceiling.

The garden unit is nice, finished, has a kitchen, and 2 bedrooms+1 bathroom, 2 egresses, stairs connecting it to the unit above as well as an exit to the outside but ceiling height is 6'5". 

I put in some new flooring and paint, minor electrical, and a couple of ceiling fans (approx 20k in repairs, appliances, travel, and holding)I put in a new refrigerator, washer and dryer, and leased it myself to a family a few months later (6 months lease) through an insurance company because of their home being a total loss.

Would need new floors, cabinets, stove, fridge, installing a ceiling in the kitchen (currently a drop ceiling), trim, and running a water line to be able to install a washer/drier. 

Deck is falling down (covered by HOA) but has resulted in an ongoing ceiling foyer leak.

The tenant below sent me pictures of a hole in her ceiling and a torn spot on the side wall  asking what would cause this.

The tenant below sent me pictures of a hole in her ceiling and a torn spot on the side wall  asking what would cause this.

When I rehabbed the basement I tore out the existing drywall ceiling and added sound-proofing insulation followed by a 5/8" fire-rated drywall thinking that would be enough, but apparently the tenants can hear us walking, the dogs claws (we have hardwoods) as well as the TV.