Is the neighboring house going to create a nightmare for me when trying to attract renters?

Can be done, but at much less attractive terms.  

I think you need to figure out who you are as an investor as far as things like how hands on do you want to be, Are you going to manage it or are you going to hire it, Will you do the repairs or are you going to pay someone, what type of tenants do you want to attract, cash-flow v.s. equity, etc.....

What's a good place to advertise or attract buyers?

It ended up attracting only bad tenants.

Pull the comps for 3/1s (and/or 3/2s) in the same exact area to see what kind of uplift you can get from the renovations, and then estimate the cost of the additions and see if it is a net positive.Clearly a 3/2 would be much more attractive than a 2/1, but it should be quite straight-forward to do a cost-benefit analysis.

I really didn't want to be a landlord, but a 2 bedroom would at least not attract large families/kids.

My intention is to help educate other investors and also to attract private lenders or JV partners.

The tremendous growth that Atlanta has seen in recent times has been attracting many people to invest here.

Once these basic items are taken care of, then you can determine how you will make the place attractive.