At some point you need to go with your gut and just bite the bullet.

Your first instinct was correct.

This property is going to need a full gut rehab, with all cosmetic items (kitchens, baths, paint, carpet) and all mechanical work as well (plumbing, electric, and HVAC), to both units.

Before I got savvy I bought a 75,000 BTU furnace for a gut remodel in Los Angeles.

@Stanley Ezeadi I think that if you have the funds to do a 6-figure full gut rehab on a Third Ward property AND then spend money on all the furniture, you're already better off buying the $500-$600k retail price for a 3bed/2bath townhouse in luxury Midtown Houston WITHOUT all the hassle of managing contractors.

My gut tells me that these areas will be hit harder than other areas. 

I think my gut is probably right on this one

I’ve seen those types of places (old two flats) be bought in the $400k range, get completely gutted and redone on the inside  and then get sold for around $1m as a beautifully renovated single family. 

Basement was a full gut to accommodate 3 beds, kitchen, bath, egress windows .

Full basement gut, adding 3 more bedrooms , kitchen, large egress windows and bathroom to the basement.