Now I have 6 automotive lifts, an alignment machine, tire machines, etc, etc. 

On the west coast where I grew up, I'm used to seeing dead bugs for a couple days after a service and then they're gone, so maybe it's my expectations not being aligned with life in the South... 

Many tax credits and incentives exist for investors, it's up to them to find the one that aligns with their life plan and investing strategy.

The approach of the appraiser ignores the current market rent values by assuming the value of the rent at the time of close is aligned with the market.

Credit score, liquidity, LTV, cash in the deal and the deal itself are the key components to private money terms.

As @Jordan Moorheaddan Moorhead touched on, the focus is on components, because in 80+yr age homes it is 2 separate items, the components and the structure. 99.9% of the time these homes have had major renovations, I would say 100% but there may be an odd ball multi-decades abandoned place without such, so 99.9.

I have several C properties that we have been able to improve by doing what @Karl B. mentioned, as well as some necessary upgrades to major components like plumbing or roofing.

Plumbers and electricians are at the top of this list.I often advise potential clients that when making the decision of self-management vs. hiring a property manager: consider this is an investment property and is likely only a component of your investment portfolio.

If the stars align, this might allow you to get the best of several worlds - a larger, nicer asset that is more meaningful to your overall financial position, a great owner-occupied loan with a low down payment, and a potential for significant cash flow. 

So in a stars align perfectly kinda way, the best way would be a combination of the two you already mentioned.