We are hoping to remove one wall to open up the kitchen as well.  

Last month he moved, the unit was in really great shape, just repaint a few walls and cleaned out.

@David Walls That's right, make connections.

A license without knowledge of how to put together a deal package is useless piece of paper hanging on the wall. 

The house does need very minor repairs such as paint, vinyl floor is pealing up in a few rooms and dining room has wood panel walls I was going to dry wall instead. 

Someone tried to drive through the wall.

Some walls are stucco so need patching where has came off, flooring put down in addition (still plywood on floor), etc.Thanks for reading my long story!

Since there is nothing now, you will have to run all utilities to the site and construct everything (foundation, roof, walls, and all interior finishes) I would definitely call some GC's and get a better ballpark figure and be positive the city will allow you to construct.

Insurance will cover mostly new flooring & painting on the walls, but that's about it.  

I've even had issues with lender requiring repair for holes in interior wall from a removed speaker system, holes in carpet exposing slab, oven not working at appraisal, so a lot of what many see as minor issues can cause lender to not approve the loan.