My goal is add another unit to add value which should help the refi, but will likely factor in a 2-4 extension in the terms.

For instance if someone knows that there is a development planned for a couple years out that will severely increase the value of their property they are willing to take an educated gamble. 

Although I’ve heard people warn against hardwood in the kitchen, I wonder if anyone has really had to replace hardwood due to extensive damage in the kitchen?

That's how we have ours written and laws may be different in your state. but always start by referring back to your lease and then decide whether or not you will do a repair because in some instances it may be the tenants responsibility. also I would have recommended against not having allowed a employee of a company that is managing your property to live in the property.

Banks always got LOTS of notices and extensions of time to increase their capital, but then eventually a day would come when no more extensions were granted, and the deadline was the deadline.

For instance, on one note I bid on, the property had $10K+ taxes outstanding, but in their system showed as current. 

For instance, in Florida, they list be held in a Florida Banking Institution.

However, there is at least one instance I know of recently where the homeowner was required to change the house back to a single family home and then had to sell it due to their zoning violations. 

But I've also been in that boat so many times that I finally just figured the worst I could do, in most instances, is be out some time and materials, and I would learn something along the way.

Here a present situation in 2023/2024 (post-pandemic and implementation of Early Resolution Program):-Lawyered up and serviced notice of eviction beginning of May 2023-Order to evict by default judgement granted October of 2023 (after many court dates due to extensions because of tenant avoiding service, ERP, and tenant not showing to court)-Sheriff comes to evict January of 2024.