I am looking for some advice concerning investments with my partner a.k.a. my brother.

being from hurricane zone i understand your concern!

Even in the case of true below market rents, the act of raising the rents will cause a loss of some tenants, which results in a loss of income and the expense of obtaining new tenants. 

That is what caused me to start looking in the first place. 

With scenario 1, my concern is the opportunity costs that would come with purchasing a 300k home.

Is your first concern that the doors are large and formal, and that the rooms have large windows?

I had a girlfriend come stay a few nights to avoid that. bosss got mad and fired me cause his new helper had nowhere to go .. rent is due tommorow, the landlord , my bosses friend showed up lastnite with the local police, told me " the lease is expired , you have 30 minutes to vacate the premises, or you wil be arrested for criminal tresspass. the cops backed him up ..

What I can't tell is if updating the plumbing and electric now will cut down on future headaches, or will the headaches be caused if we have a few hundred more to pay monthly in loans on the renovations. 

My concern is how they are producing bread on the table, today, not some future retirement strategy. 

The only concern I would have would be the holding cost of the HML.