I know SF is an insulated market but my finance people are telling me there is hurt coming to the lower level professional class.  

Before I did that I would have blown insulation put into the cavity between the upstairs & downstairs.

I use cellulose insulation blown into the joists space in the ceilings of the basement unit.

It is also what the majority of my market does.When I took over I set about to conserve where I could by Insulating and installing new fixtures when renovating.

@Greg S.Look at your attic insulation thickness and R-value.   

I do see where he can be insulated from what you may present to a seller and simply closing the transaction in his entity.

So the question is, as a retail buyer, will they care to pay a premium for brand new insulated ductwork with a brand new unit?

I spent around $1000 on all materials and did the labor myself (except for the tub plumbing), including adding ventilation and insulation/drywall. 

Each year you are taking the 'profit' but when you sell you basically get your purchase funds back (ignoring inflation).As well, both examples are affected by any leverage you may take out on the property; All-Cash ties up the capital but insulates you from interest changes while highly leveraged may allow you to purchase more but has interest rate risk (it also eventually ties up capital as the loan is being paid).

I bought it at auction a year ago and now have my second tenant family living in it.The driveway is about 30 feet from a 4 acre woods (neighbor's property) and the tenants have problems with rodents eating their car wires and the insulation attached to the underside of the hood on both their vehicles.