In Indianapolis C to B class neighborhoods I have rarely seen insulation upgraded on rentals especially doubles that have never been owner-occupied.  4th air gaps,  poorly fitting windows, and doors can be easily corrected with proper caulk and weatherstripping (usually).

Otherwise, you may need to replace a water service (13-15k), electrical service (10-15k) and upgrade wiring (This is a tough one, but maybe an additional 8-15k inside).

I did just this in my two flat, it cost me around $150k to rezone, dig down, upgrade everything plus fee after fee after fee and materials after materials.

The house includes high-end upgrades such as custom cabinetry, granite countertops and energy efficient appliances.

It's a nice place and an upgrade to my current apartment I rent. 

Roof, plumbing, electrical upgrades? 

Do you have the systems to upgrade into more of a project?

Not sure if they have upgraded to desktop appraisals but if they are still doing in person appraisals , make sure you get everything (scope of work, good faith deposit, social, LLC docs, insurance, proof of prior experience, financial statements) in ASAP.

Again, if your $250k is true, and includes all the electrical upgrades, new plumbing runs, potentially new foundation pour (since I assume the existing garage slab is not capable of supporting a new two story house), I am guessing since I don't know the market, but assume you will have a lot of equity by completing the project.

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