There are so many variables on what can go wrong with TK.  

Bringing soil and various other gardening supplies on the roof will add a lot of weight.

If cabinets are salvageable, paint them and put new hardware, neutrals paint colors throughout, light fixtures, neutral laminate countertop, no carpets, tub/shower surround, stainless appliances  (if you supply them) The key is clean simple lines.

There are a lot of variables, but for pure investors, I direct them to Denver, a major metropolitan area with long term renters where cash flow properties exist.  

I know NYC law says landlords must supply heat and hot water but this is beyond my control. 

I understand its not very simple to get the average home values since there are a lot of variables.

You could choose option 2 but it might be better to tap into the water supply from the downstairs bathroom and put a small kitchen sink and cabinets.

There are way too many variables involved, including your financial situation (Gurus always speak as though everyone has $100K lying around), property condition, location, local laws, tenants, your ability to manage, your skills at repairs, etc.

.  UCC filings on equipment (Dunn and Bradstreet may be able to supply lists).  Research classified ads for commercial properties and contact the seller or realtor.  Network with CPAs, attorneys, and financial planners.  Join your local Chamber of Commerce for lists of businesses in the community.  Listen for radio ads directed at self-employed business owners and network with those companies who place the ads.  Research tax sales on commercial properties.  Contact leasing agents specializing in commercial properties.  Being an IAP comes with commercial leads but always look for other sources as well.  Realtors are always looking for lenders who handle commercial mortgages.  Social media, Facebook, Linkedin, Twitter, Craigslist, etc.

The interest rate is variable (as with all helocs), and right now is about 5% (prime + 1%, I believe).