When I’m working with a client and helping them set up a model, I find that using old settlement statements is the best place to start.

After you have a safety net of about $10-15k, then you could be able to sleep better at night as well. 

In short, I'd run my numbers both ways; 1) basic facelift, and, 2) update rehab, to see which makes most sense.Market rents depend on a number of factors; safety, proximity to employment, public transportation (if applicable), features, options, finishes and amenities. 

It’s a 4-unit building so it’s not just his safety but also at least 3 other people that could be affected if something was wired wrong. 

While I got the sense that Austin is generally a fairly safe area, some neighborhoods really are block-by-block as far as safety/average income level/etc. - I'm just starting to take the area a bit more serious as far as possible REI opportunities so I may not be the best person to ask that question but I can certainly ask my friend and if they're comfortable with it, I'd be willing to pass their info to you!

The business model is profitable and the cash flow looks good.

I have been watching properties for the past 6 months while I saved up a cash reserve and almost made a purchase on a single family but pulled out due to safety concerns about the property.

I can't say that one model is superior to the other, but each carries different amount of work, risk, and reward.

This is somewhat of a good thing as it's a safety net that stops you from over-valuate the ARV/doing too skinny of a deal. 

It really depends where you live and what your business model is after all.