The issue with the floor is that the soft spots are likely caused by leaks in the plumbing under the floor.

If 2 and the bathroom is on the second floor, the plumber will need to access the other plumbing/water lines and this could involve accessing walls and ceilings in various areas depending on your layout.

They said the building would need to be updated for plumbing and electrical as it was 65 years old. 

You need proper egress even to call it a bedroom so once you start venting cooking, lining gas, and doing plumbing, the town will be very tough and as I said, unlikely to want a single-family to become a multi.

Running new plumbing lines to a house.

If any of the "Big Five" systems (HVAC, plumbing, roof, electrical, water heater) haven't been updated recently, they still should be budgeted, even if you expense them later.Also, if you're primarily buying for cash flow, then this seems like a whole lot of work for just 7.75% CoCR!

Here's what the quote covers:- Conversion of 2 bedroom, 1 bath main house to 3 bedroom, 2 bath (~1040 sf footprint)- Demolition of existing walls (existing dining room wall, wall between kitchen and living, bathroom closet)- Finished Shell (Reframing opening to living room and kitchen, shifting openings for bathroom/bedroom, new walls at bathroom and dining, level - Replace all aluminum windows with fiberglass windows and screens- Upsizing plumbing, and relocating fixture locations as necessary- Upgrading electrical panels- Assume heat pump and ductless mini-split for heating and cooling- An allowance for kitchen appliances including combination range, hood, dishwasher, microwave, refrigerator, and washer/dryer- An allowance for mid-grade plumbing and lighting fixtures (Delta, Kohler, or equivalent)- Mid-grade plumbing and lighting fixtures (Delta, Kohler, or equivalent)- Ikea cabinets or equivalent with solid surface countertops, includes island- Assume solar system to be installed on the house including battery storageFor the garage ADU, the garage would need to be demoed and rebuilt, but we would benefit from building within the setback since the garage is on the property lines.

1/4 drywall over popcorn ceilings and wallpaperMudjacking can be an alternative to replacing concrete in some cases.Resurface old tile, tubs, and countertops if they're in good shapeDefinitely vinyl plank in rentalsNew scratch and dent appliances, if you can find them.Amazon for pretty much all plumbing and electrical fixturesRip down  3/8 plywood for cheap shiplap.Using contractors who are budget conscience can save a ton.

I am responsible for designing HVAC/plumbing systems for commercial buildings.

The plumbing scope found new plumbing in the house but outside the house was rusted cast-iron that the scope was unable to continue going through.