When he redid the siding, he said he added 1 inch insulation under the siding instead of the original 1/2''.

I'd also wonder what the costs were estimated to install things like insulation, kitchenette, removing/adding doors, etc would cost and how fast you could make up the initial investment in rents.Then of course you'd have to consider if your family will be able to handle giving up the storage space LOL

We did a very thorough inspecition of the property and it needs: New roof, AC, Insulation, Windows, minor electrical issues, new stairwell, main drain replacement and it of course has termites.

Cons: my grandfather hack jobbed most repairs. leaking roof, stoop and porch need redone, lower unit kitchen needs complete remodel, 4-5 coats of paint on all walls, reoccurring mold in 1 bedroom and same bedroom needs insulation, upstairs unit you can hear anything and everything, all doors are original that came with the home, also have 4-5 coats of paint on them. small cockroach pest problem (not severe YET), Bathroom needs remodel and sewage lines need repair.

The work involved is remediation of mold in the bedroom,  new insulation and sheet rock the bed room, the water pipe has frozen, since the bank winterized the house later.

Be sure to insulate very well so the AC doesn't have to run much.

I'm not an attorney but most I talk to seem to favor holding in an LLC name but do caution that its not going to 100% insulate you personally from claims. 

Now is the time to begin insulating yourself against bad times and down turns. 

Doing this insulates you from major downturns since your highest rent that will be max performa for renovated units is still way lower than class A.    

I was shown two water tanks that were installed in outside sheds (with no insulation), with just a little electric heater running to keep it barely from freezing.