Use lead certified contractors if doing any work/repairs/improvements. 

If I don't understand the fundamentals of the terms myself, how can I confidently approach the topic.

Sell "as is" and they can make any improvements they want.Or, you can sell on a lease option same terms but with a 3 year option agreement.Or. you can rent the units out if zoning doesn't allow selling each side.

-If your credit is too low, banks won't generally lend to you, so you'll want to figure this out and improve your credit if need be.

You mentioned capital improvements, would this be similar to an upgrade rather than fixing AC or replacing water heater etc?

Knowing where you want to go begins with knowing where you are, and with that in mind I reached out to a national bank just to see what kind of mortgage I could qualify for and how I would best improve my current situation in case I needed to use conventional financing.My credit score is mid-700s, about $15k in consumer debt (which is coming down).

Be confident! 

A few specific concerns would be the length of the lease, the credit strength of whoever signs it, the strength of the tenant's business, and any rehab or Tenant Improvements (TI) discussed in the lease. 

All need improvements ($5k-$10k/ unit) and rent can be increased substantially.

The main reason why homeowners opt not to pull a permit is because building improvement will increase property taxes.