2) Electrical: Because we have no heat, we've been using two space heaters.

There is a small park about a mile from the property, so I know the infrastructure (water, electricity, sewer, trash) is available for a build. 

Does the cost per sqft account for electric and plumbing? 

It is important to find something that was properly maintained, with modern plumbing, electrical and roofing. 

In my home market of Florida, our insurance rates have made it much harder to have positive cash flow on a CRE deal.

Helps with your debt to income, better opportunities at cash flow, and typically requires less down to purchase.In regards to challenges, I usually build in an extra 10-15% to deal with things that I can't see behind the walls, including dry rot, electrical or plumbing issues, etc.

@Alecia Loveless is correct--tenants need access 24/7 to their electric service panel, water and heat, assuming those are individual utilities for each unit. 

My hunch is that's $85K for the garage itself before plans, permits, engineering, sewer line, electrical panel, etc. 

We had to do a lot of electrical work, bathroom, kitchen rehab, total paint and a new roof.

Electricity can also spike in the summer with A/C.