The building cash flows at 50% capacity and I am having the vacant spots upgraded in order to get higher rents.

We're looking at an off-market duplex that the owner is selling because they are in need of cash for their next purchase (they are wanting to upgrade and purchase a lot of land).

Also upgraded the HVAC from the original plan which was just going to be a wall unit to central heat and air.  

Not all upgrades will effect the value determined by an appraisal but it can help to increase the value in the eyes of a potential buyer.

I'm running into a decision road block for either a multi family to house hack and update one unit at a time or a single family that needs upgrades. 

I currently have a 0% ten year loan for upgraded heat.If you have gas on the street, you should be able to get the utility company to bring a line to your house for free if you use enough BTUs.

In my experience the master shutoff is outside of breaker panel anyways when it's been upgraded.

All cosmetic upgrades.

If you need to upgrade foundation/studs not to mention running new electrical, water, mechanicals those costs will far exceed the value of the existing garage shell. 

Also, I re-ran the numbers with a 10k reno and total rents received (after paying utilities) at $800 (which I've had a realtor, lender, and local inspector/contractor confirm are market rents for the area with the upgrades) and I came up with a 22% CoC return.