My main concern is the cost of turning the property into a MTR especially with this being my first property.

The contractor will be your best resource to understand cost of the design; the earlier you identify value engineering opportunities, the cheaper it will cost to incorporate (Google: ‘Macleamy Curve’).

If the property can be respectably sold for $250 you have to be all in at around $200 including the commission and carry cost.

Replacement cost.

The cost per unit is actually below average for Reno and maybe bit high for that location. 

We took over the property management because the owner was having multiple issues with a few of the "tenants" that have illegally sublet the property, and we are now dealing with the ripple effects (e.g. squatters, dogs, dispute with neighbors etc.)The landlord is cash strapped, and has asked me to go in on the property/deal with him in order to get a cash infusion to cover legal fees & renovation costs. 

In most cases your better off buying with "All Cash" and then you can use a "Delayed financing" program to get up to 80% cash back LTC loan to cost.

This typically costs money, maybe $.02 -.10 per record.

There are a lot of programs available to help with renovation costs being built into the loan on a primary residence purchase.  

Also, calculate potential profits by considering purchase price, renovation costs, comparable sales, and expected rental income or resale value before doing a deeper dive into the specifics.