Based on my interpretation on the information provided though I would recommend the fallowing:If you have just a knee wall (mini-wall) it could be removed to provide a few extra inches if that's all that's needed.

Every single shower and floor tile from that era has about 1-2 inches of mortar AND metal lathe (screen) to keep it from cracking.  

@Absalom Young Yeah.. for months we tried to extend an olive branch and work with her... but if you give her an inch, she takes 10 miles! 

A tip of advice, work for a placement that best allows tapping into existing waste lines, water lines are no big matter to run distance but waste has strict plumbing code that is distance impacted, as in inches matter, seriously.

Give them an inch, and they'll take a mile.

Stop what they are doing or leave.Right now they are running your operation not you.I recently had 10 inch move-in 3 days later they had a cat the next day they had a quit or cure issued, pay the pet deposit or leave.

I would cut out vents on t he second floor, run my flex to the vents and the frame the perimeter of the first floor ceiling about 15 inches lower and install high hats and drywall.

The strategy of purchasing buy/hold properties and inching your way up into multi-families is awesome.

Start with a multifunction painter's tool, a 2-inch flexible putty knife, and a 4-inch taping knife.One of the best get-you-out-of-a-jam all-around power tools that you can buy is a variable-speed oscillating tool, which is often called a multitool.

Give an inch today and they will take a mile tomorrow.