have to look at how much it will cost you to get in . how much will cost you to build . how much it can be sold for 

The dilemma i have is that I can’t decide if it makes more sense to embrace the c class identity this property gives the impression of, or put a lot more into the renovation, get better quality tenants and convert it to the B class property that the building (and the area) should/could be. 90% occupied, the yearly rental income is around 600k with 420k NOI. 

Build the secondary units and legalize them, then refinance with them in place.

What made my investor interested in this deal was being a corner property you are able to build a full 3rd story addition by right which would massively increase the value of the property with similar 3 story properties trading in the low 600k's.

By putting 10% down I probably will be less than breaking even every month ((like an extra $800-900 per month at very low/conservative rent prices)  with the building fully tenanted (as is condition not counting value add with renovations). 

You hardly build any equity in your first year, it makes sense to refi only if the rate is substantially lower or if you can get rid of mortgage insurance.

I wouldn't rely on information here as we haven't seen your building nor understand your bigger goals but this is not something I ever recommend my clients to do....even if they have a few deals under their belt.

The key, especially in the $500k price range where you have lots of competition, is setting the home apart to make it unique.

Like a basement apartment etc.

Building dept. for Unincorporated Arapahoe County is apparently overwhelmed and understaffed.