Also, expect a phase 1 environmental report fee, which is also expensive.The bank will probably ask for a commitment fee up front before they'll order the appraisal.

I know I will learn a ton about these topics on BiggerPockets.com.I work as an Environmental Consultant during the week where I escape to rest up from my weekend and evening real estate projects. 

Since it is "AS IS", am I required to give the buyer time for inspections, including physical and environmental, documentation of the property and title?

If so and even if not, you need to pay for a phase 1 environmental report.- utilities:  septic, public sewer, well water vs municipal water.  

How expensive (and reasonable) would it be to square off the top floor so that the roof is flat and the top floor unit has the same footprint/space as the other units (i.e., not 45 degree walls!)?

I would Google these companies to find their online footprints and to read what is out there about each. 

Also, it will be good if I can get an idea of total out of pocket expense before SBA loan , not including down payment.Site surveys, soil testing, environmental studies, archaeological surveys, perk testing, wildlife studies, code variances, and I can keep going on and on and on. 

In our case, most of the houses on the street were built with the same footprint (and the same roof pitch), and already had finished attics, so we were pretty confident this wouldn't be a problem.

Along with the other great replies here, just wanted to point out that good neighborhoods with great schools and community can and do become bad neighborhoods with poor schools and community through redistricting, rezoning, age and obsolescence of the area, possible environmental issues, freak earthquake or flooding not covered by insurance, etc.

Installing roads, water & sewer laterals, negotiating utility easements, doing soil corrections, navigating environmental impact studies????