I would ditch the garage conversion idea.As Kevin said, the numbers don't look great but unless you buy more house or broaden your area you probably won't be able to do much better. 

We signed a contract with the seller that stated " Seller to pay for repair costs for the items discovered via inspection" .

The big ticket items that you don't replace now will eventually need to the repaired or replaced if you hold the property long enough.

I like sourcing items from auctions, thrift stores, and up-cycling so take that into consideration.

I am estimating that there is still about $5500 worth of work to complete the project plus the dishwasher, refrigerator and some bathroom items (that I have already paid for).The gentleman and I still have a relationship and he is paying for a guy to come work when he can afford it (telling me he is building mobile homes for $12/hr during the day and managing the night shift at McDonald's to cover bills and my work).

Only attorneys could follow that conversation!

On these deals, speed is critical, have the conversation with your lender and get that pre-approval letter ASAP, so your offer can go in immediately!!!

However, in my opinion it's far more about your integrity and your character as a person in which materialistic items won't help in that aspect.

Large CapEx items: $152.77 (10.1% of gross rent)Budget to replace the roof in about 8 years for around $8,000: $83.33Budget to replace the 2 new furnaces in 15 years for $8,000 including labor:  $44.44Budget to replace 2 new water heaters in 10 years for $3,000 including labor: $25If my math is correct, then that puts my total estimated expediences at $1,254.61 leaving only $245.39 total cash flow (or 122.70 / unit)...

You're still having active real estate conversations with people without doing the grunt work of being a showing agent.