Usually when I do this I tell the tenants up front that these are the upgrades I am making to the property and this will be the new rental price.

I know (for certain) that it needs at least $20k in electrical and plumbing upgrades.

Maybe try to upgrade them to another market of investing. 

We started out by explaining to the tenants, our plan to upgrade and improve the property.

I know of other situations where the pump had to be upgraded but that cost was minimal to cost of heating. 

We did finish the basement with a lot of upgrades and it is a 2 bedroom 1 bathroom. 

.$94k/yr rent currentlywell maintained w/ recent capital upgrades in last 7 years.appears to be nicely maintained.And another question: assuming I buy this and do a mortgage...What could a strategy be to leverage this to purchase and buy other properties?

What would you upgrade to get the most out of the bathroom, floor, sink and bathtub?

You can use that info to decide what if any upgrades you want to dump money into with or without permits.

If you upgrade your lead spend just a little into a vetted source, a VA will have much more impact.