I’m halfway through David Greene’s BRRRR book and there are definitely a lot of tips in there that are still applicable and like you mentioned, adding value through adding bedrooms, bathrooms, kitchen and bathroom upgrades.

If you're very lucky, your existing walls will go down far enough to account for the added height, but it's unlikely.Just a heads up, if the city deems you need to upgrade your service and utility lines to account for an additional unit, and/or add sprinklers and/or add a fire alarm system, this is going to cost you quite a bit.

Many people do well with upgrading your home every 2 years, with a new FHA loan, while renting the prior one.

Here are some of the numbers and my two general plans.Under contract for $412k20yr commercial loan @ 3.25% (need to put 25% down, $309k borrowed)Property Tax @ $7850Total Home Insurance @ $180/monthRent roll totals $3775/month (estimating that we could increase to $4400/month with minor upgrades)Strategy 1 (Do nothing)My math shows cash on cash at about 10% (with property mgmt and no upgrades) and with the increases we can get up to 15% (assuming little to no upgrades).Strategy 2 (Sell off one of the SFH)We think we can sell one of the SFH's off and attain ~$170k after the sale (this one rents for $1200/month now). 

If you get a property that has a solid foundation, no epa hazards (or they have been remediated already) and upgrades completed, those can be gold-mines because the construction methods back then were to build for an indefinite duration, with virgin timber, generally resulting in an obsolescence rating of 300+yrs with upkeep meet.

The property is a Triplex (2 x 2 BR, 1 x 1BR units) in a nice neighborhood with a new roof and some recent upgrades.

Added a second bathroom, upgraded the kitchen and exterior of the home.

Select from a larger selection of properties for sale (in any condition), including condos, townhouses, mixed-us, multi-family, single-family dwellings and those that do not currently meet FHA standardsWhen offer is presented properly to seller, 203k offers may be advantageous in a competing offer situation as the seller does not have to fix-up or repair the property but instead allow the buyer to include these items into their 203k mortgage and complete the improvements after closing using the buyer's own style and design.203k Benefits to Home Owners & Sellers (not all inclusive)Market property to more buyersAllow buyers the opportunity to renovate, upgrade or improve to suit their tastes and preferencesNo need to settle for low-ball cash offersCurrent condition of property not required to meet FHA's property standardsBuyer is permitted to correct any property deficiencies after close of escrowNo more inspection concernsAbsolutely no repairs are required prior to close of escrowSeller not responsible for cost of repairs/improvementsTransaction will close with property in "AS-IS conditionClosing occurs in 45 days203k Benefits to Realtors® & Lenders (not all inclusive)Increase income by selling more homes and originating more loansRaise real estate values by improving homes and neighborhoodsDecrease foreclosure inventoryHelp buyers who previously could not buy homesHelp seller/owners with properties in outdated or fix-up conditionSpur economic growth by creating job opportunities for the construction/remodeling industryPromote an under-utilized niche program that not many Realtors® or Lenders understandRevitalize your community203k Disadvantages (not all inclusive) upfont MIPMI for life of loanSupplemental origination feeInspection feesTitle update feesmore complexmore moving partshigher interest ratepossible longer closing timeBut working with the right 203k Lender, a contractor with education/experience with the 203k, such as a Certified 203k Contractor, the benefits can definitely outweigh the disadvantages. 

Hers does have upgraded countertops and cabinets in kitchen, Floating floor throughout. 

She also offered to paint it as we only had primer on all the walls & then she upgraded all our basic HD light fixtures, faucets, then had her own 'better' kitchen backsplash installed.