The right tenant will build out the space with AC and plumbing.

The minimum $33,500 is to complete the minimum rehab, updating electric, plumbing, kitchen cabinets, doors, trim, paint, appliances, curb appeal, etc.

In general, the order should look something like this:  excavation, inspection, footers, inspection, foundation walls, damp proofing, drain tile/sump pump, inspection, backfill, plumbing (if you are putting anything in the floor of the basement like a stub for bathroom, drain, etc.)

What condition is the roof, hvac, plumbing and electrical in?

This includes examining the structural integrity, plumbing, electrical systems, roof condition, HVAC systems, and any other significant features.Title Search: Hire a title company or attorney to perform a title search on the property.

As a renter, he won't understand the HVAC, plumbing and electrical stuff.

Can they reroute the plumbing around the exterior and abandon the existing system or do they have to replace it?

That usually means the units were renovated, but what about structural, mechanical, electrical, plumbing?

In reality what happens is you end up paying more for a "clean house" but because you are doing a flip people want new mechanicals (central air, 200 amp electric, pvc plumbing stack) so you end up doing a full gut or larger rehab then simple cosmetics and now your returns have shrunk.In your situation for your first investment I would be ok with a smaller return because of the experience gained, but for the next look for larger profit.

You can get rid of many of your annoying little 'old-house issues' by buying an existing house that needs repairs and literally doing everything: new plumbing, new electrical, new drywall, new roof, etc....