For example, there's really no claiming that you lived in someone else's filth for years 🙂But, in the future I would always walk around the house and take tons of pictures + videos on move in day - being sure to get things like carpets and under sink areas (proving there weren't any leaks) in detail. 

Next, the carpets were nasty - $2,700 to replace the carpeting for the 3 bedrooms.

Hard surfaces will always be louder than carpet.

New PVC fence, new landscaping, pest extermination, new paint, updated bathrooms, updated appliances, new carpet, heavy cleaning, serious trash cleanup.

Additionally I put in 2 new retaining walls, painted the entire inside common area, new carpets, added a small gym, and put up nice artwork (essentially it looks like a brand new building)My question is about cap rates......I know cap rates are based on the area and general economic conditions.

We fixed all the issues with the home, water damage from the chimney, ripped out old carpet, installed laminate over almost everything.

Not sure if we're talking illegal amounts, but it was strewn about and a mess (on the table and the carpet).

We also removed the old, stained carpet from the stairs and added wood treads that matched the hardwoods throughout.

How much should we know about the physical aspect to real estate such as the structure, carpeting, walls, plumbing, style, etc. before investing?

I also own a carpet/floor cleaning business for those folks in Metro Phoenix who need help with getting a Great carpet cleaner, I would definitely take your advice in exchange for my services.