Look at the cost to put in sound proofing insulation vs normal batt insulation.

It obviously depends on your personal financial situation, but I agree w/ the other folks in terms of SF being a unique market and somewhat insulated from a lot of the economic swings as past data has shown.

We have over $20,000 worth of insulation, fixtures, appliances, and other miscellaneous items already purchased and in the house along with a $37,000 down-payment. 

My hesitation on doing the 85% is that it would expose me to more risk if the market drops, San Antonio is somewhat insulated from this based on the last market drop. 

That said, I wouldn't install the minisplits without an aggressive insulation and air sealing program.

Is it true that in cold environments some tenants of old houses will board a window for insulation purposes?

I find that MF's are even more private and insulated than finding off market single family homes. 

As has been corrected pointed out, the thing was insulated with asbestos (after it was converted).Any competent residential HVAC guy will have at least read about these.What you're going to end up doing is removing that and replacing it with a modern updraft forced air furnace set on its lowest blower speed and some additional ducting.

The joists and beams were wet, insulation was wet and sagging, and minor mildew/mold noted on various insulation.

The new bid was for tear off and replacement with a quality, thick, EPDM, an insulation layer, and included four (4) sheets of sheathing (4'x8') per building.