You cannot exchange for improvements on property you already own. 

The home, as-is, can work but it needs improvements and updating. 

I would not try to use your real estate investment strategy as your 'improve your credit score' strategy. 

Average rent collection $4,400 given vacancies Utilities we pay: $700 a monthRepairs: $200 a month (some improvements built in there)Insurance: $80Property Taxes: $125 per month@ 12 years= $1,471 payment.Net cash flow: $1,824.Appraisal come in at $150,000 today.Combined the properties should cash flow over $2300 a month.

Any ideas to improve?

I'm still figuring out how to improve the free marketing that works, for those of us with fewer units.

We bought for $133k and replaced the flooring, updated one of the kitchens - (a duplex) painted, and made a few other improvements.

Asking price is $159,000 and the house immediately next door sold for $599,000 but a few other houses in the neighborhood sold for much less but still above $159K.The house could definitely be rehabbed and improved both inside and the exteriorSo, here’s my question:Should I buy this house at $159K, rehab it, and hope it sells for around $599K?

You cannot change location, and you can only improve the house itself, not the neighbors. 

The improvements were financed through silent/private investors.