There is some damage to the home (broken doors, nails and holes in wall, bad odor due to not cleaning (and cats I assume), and destroyed carpets. 

Last year, after a storm, my tenant reported a crack in the wall and floor.

Mold had grown on 3 of the 4 bathroom walls and water was all under the sink cabinet and on the floor.

Oh, do you think you can paint the walls before I move in?

Couldn't pass the inspection until he ripped it all apart, removed 2 new kitchens and 2 new bathrooms, moved walls, etc. and made it a 2-family building.

A C-10 Electrical contractor can explain how to split the units, you may have to sub meter yourself.splitting a single unit in 2 is generally more complicated than building a common wall. 

Quote from @Jaron Walling: @Aline Elad You said "we" so assuming you're married you can exclude up to $500k, or $250k single, in capitals gains if you lived in the property for 2/5 prior years. 

The conversion will also have a 5x10 walk-in pantry that is open from the kitchen (garage and kitchen share a wall).  

with no seasoning on this model I suspect its some portfolio type lender.. but who knows maybe wall st is at it again.. now they know they have their bottom feeding hedge funds to  pick up the crumbs when their loans default  :)))

Purchase price: $235,900 Cash invested: $70,000 Sale price: $399,000 Complete Renovation: deleting walls to open up kitchen into living room, new kitchen, cabinets, appliances, custom doors, floors, trim, paint, new laundry room, new powder room, new master bathroom, custom woodworking, exterior farmhouse paint, all new interior paint, etc.