Becoming self sufficient slowly, and conservatively is not sexy but it does work.

Would this be a sufficient size to add another 1bed/1bath apartment to?

They argue that their renovation is top notch, so the price is justified, which may or may not be true, but but generally the high quality of the renovation does not pay sufficient dividends in the form of increased rent, so the price to rent ratio just isn't there.They typically advertise a 9% to 13% cash on cash return, but be careful, this is their "first year projection" and in their first year they do some things that I find a it deceptive, such as not accounting for vacancy because they place a tenant prior to closing, and they budget essentially nothing for repairs or cap ex since it is renovated and they offer a warranty. 

It's a fallacy to line them all up and try to have them go head-to-head, or to zoom in on hypothetical return modelling that really doesn't sufficiently account for the reality of how the instrument may perform.My two cents is to work with a qualified financial professional that can help assess things that might make sense for you, model things specific to your situation, and then make an assessment for what things seem to be a fit, and which things don't.

I would suggest getting professional pictures taken, or at least using something a bit more high quality and ensuring there is sufficient light in all the rooms.

Whenever you are using leverage, you need to have ample slack in the system and sufficient cash reserves (or access to cheap & instant cash) to cover vacancies, capital expenses, unplanned maintenance, and other issues to avoid missing your note payments. 

If the market cycle changes; if your area of interest isn’t right; if you don’t have sufficient capital or credit; and if your not a “fit” for the work necessary to close the transaction, then you might have thrown $15,000 or $40,000 or MORE down the drain.  

Give them a specific amount of time to clean it up or face a penalty. 24 hours should be more than sufficient.

Would I need to add a second egress to the 3rd floor for this to be compliant or would the one egress (from the back stairs) be sufficient? 

The concept is to accumulate sufficient capital and then draw it down over the remainder of your life.