Personally, I would recommend starting by getting a very good understanding of the construction process and how the various systems function, fundamentally, so you can better recognize, and understand problems when they arise.

As long as you are actively participating in its management, as the IRS calls it,  "material participation", it is considered an active investment without RE Professional classification. 

The bathroom connects to the master and the hallway.My question is any idea on how to make this look most presentable/functional.

If you have the capital why not buy something functional in the area?

It's a function of supply and demand. 

My business raises investor capital for multifamily & self storage deals, so having "Capital" in the name is relevant to our function & value add.

Furthermore, you must add income taxes, state taxes, SS, and Medicare on top of that - as well as the NEW home's utilities, which is a function of the sq footage.

I bought it with a non-functional HVAC system; the seller told me he had someone take a look at the system and they told him the repairs would be so high and it would just be a band aid that he really needed a new system.

Multiple Bedroom HousesIf you can’t find any multi-family properties (or properties that have been modified to function as such), you’re next best bet is to find a single family home with as many bedrooms as possible.

It's possible that it's just a function of the class of neighborhood and you might continue to have the problem.