By pushing out some walls into the un-used attic space we will be able to convert the 2bd/2bath into a 3bd/2bath.

Quite the opposite if you start opening up walls.

My first few inspections were helpful to help understand building systems and routine maintenance schedules (don’t have to worry about that stuff when you’re a renter.)Sadly inspections afterward, for investment properties, only turn up obvious items that’s hard to miss if you personally walk the property looking in the nooks and crannies.Rot, poor wiring, improper framing, water leaks, etc that are behind the walls is when I’ve gotten into trouble.

Again, inspections don’t show you what’s behind the walls and in the end it likely would have been better to simply find a better plot of empty land and build new from the start.

You really don't know what needs to be done until the walls come down.

My nature is being really process oriented and when things fall behind because of little details that could have been easily addressed it drives me up the wall. :) 

@Jaron Walling ok thank you so much, as of now my credit is at 720, so what I get the loan I need, do the rehab and then get it appraised or do I get the property appraised before I do the rehab?

You will be wasting your time.  

The buyer SHOULD have gotten inspections which would uncover dry rot by poking into exposed wood, other than smelling musty or seeing black or green scum on the walls a mold inspection is more detailed and samples go to a certified lab. 

I think it is an absolute waste of time and money... but I also think your numbers are wrong.