However, I have been rather successful in rebuilding my credit after two forclosures, two charged off cards and a defaulted car loan as well as loads of medical collections.

More sleuthing disclosed that the magic number is 75%:  When a builder or renovator sells a house where he has rebuild or modified 75% or more of the footprint / ft2, then he has to provide a New Home Warranty to buyer.

I'm married with 3 kids, my name is Darcy Maiangowi.Me and my wife have spent the past year rebuilding our credit from 450 to almost 600.

Current condition: inside is about 80% gutted, has an illegal addition attached to it that is probably cheaper to tear down (it's in really poor shape and not built well) and rebuild than make legal, has a finished basement unit with kitchen but it's illegal, city wants it returned to basement/storage.  

Another was (and probably not applicable in your case) more of a developer/flipper - tear down rebuild. 

Eventually I think you could demo them and rebuild with better looking, more efficient space.

My question is this, so much time has passed with little repair if any on the house, from the street it looks like a skid row home....if I'm able to convince the owner to let it go at what point do I draw the line between rehab vs total tear down and rebuild?

We will be hiring someone to rebuild our back porch.

I own a triplex that is grandfathered in under current zoning- meaning that it's OK to continue operating as it's been, but if I were to scrape the lot and rebuild I could not put three units on it.

I would keep the existing structure, they lots are not big enough to rebuild 2 structures.