My question is what things can I do during the initial rehab period to help work towards possible condo conversions in the future.

This conversation is mostly for those landlords that live out of town, and manage their own property. 

I believe the tax basis is the value of the property at the time of conversion.

The VA loan is powerful - no money down and no PMI - can be split across properties - caps out in the Springs around 495k I'm sure California is higher - there is a funding fee that increases up to your third time using the loan but in my opinion it's still a better deal because your interest rates are typically .15 -.50 lower so you make up the money in the longer run - If you are a disabled vet more than 10% your funding fee gets waved.

It also wants a mini split with at least two interior units to heat and cool. property is a tiny home with a full walk-in the basement (no access to the first floor) the first floor has kitchen living room and half bath upstairs has a full bath and bedroom (1/1.5).I've just started a conversation with owner mentioning id like to make an option offered with above-listed work as consideration, he said that he was open to renting to own and would definitely do a lease with labor cost for partial rent.

I've had several private conversations resulting from this post.

Basically for some of them it can be a power game to sell if they get their price.

I does have a steep learning curve but it is a powerful program. 

Thanks for the contribution to the conversation.  

Here's my point, if you drive on the property and the parking lot has pot holes and you can't see the striping, weeds are overgrowing the sign, the exterior of the building has been painted in 15 years or, if brick, has never been power washed, what's going to be your first impression as you drive on the property, if you even make the turn.If you do come on the property everything you look at, even if the interior has been completely renovated, you're going to find fault and continue to look for what else is wrong.That said, as you're renovating the exterior the tenants will actually start to get excited.