Often that means all systems, ie, electric, plumbing, mechanical, etc must be inspected and approved with the current code regs.It's best to know BEFORE you buy or try to wholesale what exactly the powers-that-be will require to un-condemn and give the property a c/o so it can be inhabited again.

Obviously, it may be difficult/expensive to install plumbing and gas, but it may make sense depending on the location. 

For example, my lease says that "The tenant shall be charged for repair of drain blockages or stoppages unless caused by defective plumbing parts or tree roots invading sewer lines."  

I also recommend that they ensure the coverage includes; AC/heat, plumbing, appliances & electrical.

There was a partial 1 car garage conversion that we converted back to a garage which housed the laundry and WH. moved the AC and had to redo the old cast iron plumbing.

It's OK to utilize generic percentages when conducting initial analysis, but once you identify a property that may be worth pursuing, I always feel it's best to know how large of a furnace i'll need based on the square footage, what the current state of the plumbing and electrical are, does the home have large decks or long driveways that will eventually bear large expenses that you may not incur elsewhere. 

The main issue is actually the plumbing. 

It also needs some electrical and plumbing work.

We had to replace 8 furnaces, a couple roofs, and a  ton of plumbing and electrical. 

Avoid taking on properties that need plumbing or electrical updates since those require permits and licenses and in my experience ALWAYS run over budget.