After seeing the photos, that would have been my preferred course of action.

@Evan Pickvet-Hall Your agent might be referring to the fact that you might not be able to qualify for typical home mortgage programs as most lenders prefer SFRs to even 4 units (even though they are both classified as residential). 

They may prefer no window cover at all in a loft living room, depending on how high up the unit is, the area, and what's outside.

I am looking for a local tax accountant who specializes in real estate investing and preferably owns properties him/herself.

We would prefer to deal with a local private lender who understand this market (Washington DC) and can quickly determine if he or she wants to invest with us. 

I would prefer to have a home warranty in place over paying for the inspection...just peace of mind...even if home warranties are crap...which they kind of are...

Multifamily has been the preferred property type for the last 5 years but Class A has become overbuilt in some areas.

Save it up for the first year and add it to the $2k in case you need to evict.You need to get at least 2 years though, preferably 3-5.

Usually if you're talking about existing PVC pipe you can just as easy put in a new flange, glue in or rubber gasketed.In all cases, yes the flange must come up in height to fit level to (or, preferably, just on top of) the new floor. 

In a neighborhood where all my applicants have low paying, undependable jobs I would much prefer to have a SEC 8 tenant.