I don't know if they want to deal with what come with upgrading to bigger properties and more tenants. 

1940’s builds are guaranteed to have galvanized plumbing and very probably lead lines for sewer connections unless they’ve already been upgraded.  

Plus contacting real lenders is great practice in and of itself.In terms of repairs, from what more experienced investors have told me, they have yet to find a property which needs *nothing* at all in terms of upgrades, even if it's just a few new GFCI outlets in the bathroom, new cabinet fixtures in the kitchen, new living room carpets, or a fresh coat of paint. 

Cleaned, refinished, and upgraded bathroom.

We did this 20+ years ago...we kept upgrading homesteads every couple of years and enjoyed the tax free profits each time, and we used those profits to purchase non-homestead investments.   

In 10 years when you've done it 10 times and the area has hugely developed you can upgrade and refinance one.

Something that qualifies for conventional today but that I could upgrade in a few years when surrounding comps are better.

Actually you'll want to provide any upgrades and walk the property during the appraisal.

If your unit is very out of date you must upgrade it to get $1200.

Say you buy a home for $50k with no rehab costs (if there were rehab costs, you add them to the purchase price. 2% rule says you need to get MARKET rent for $1000 (so double purchase price).50% rule says your operating expenses (property tax, insurance, vacancy costs, legal/eviction costs/management fees, repairs/upgrades - basically, everything but intestest & principal) would equal half of your rent.