One thing I realized (too late) when I did my own new construction is that people pay for location, square footage, and some basic amenities - hardwood/laminate instead of carpet, for example.

I would suggest you look at rental comps in the area based on square footage and number of bedrooms.

To get close to 1%/mo gross from nicer smalls, I'd have to get good equity capture from a motivated seller and repurpose/ expand the unit count and or square footage.  

One of my contractor clients buys for $500k and infuses $300k to $400k into the homes (splits the lots, or adds ADUs or square footage to the homes) and sells them for $1.4 to $1.5 plus that's a $400k to $500k gain in one year maybe 1.5 years. : you could see that as a $25k gain per month.

Do you want to just convert it to livable square footage to then sell the house?

I used RUBS (ratio utility billing system) based on square footage. 

I want to list it for more than their recommendation which is based on inaccurate square footage and # of baths and I have since received an appraisal for my refinance where the rental comps were in line with my amount.  

However, a lot of other rehabbers are adding 3rd story additions to these 2/1 houses which is also adding a lot of square footage.

Zillow has it valued at $117,000 my Cody Sperber Analyzer according to the square footage and area factors has it at $127,000. 

As a home owner you are allowed to remove asbestos yourself up to a certain square footage before you need to use an abatement company.