The best analysis on the subject I've heard is on Brandon Hall's Real Estate CPA podcast (episode #3), but I'd love to dive even deeper. 

I also think your property tax expense is off by a substantial amount.

Do nicer units in the area(with kitchens of course) rent at substantial premiums to the subject property's units?

@Geren WilliamsKeep substantial cash reserves.

Or if you are able to secure the right contractor then dive right in? 

One concern is that parking requirements, not the headline density limit, may ultimately be what limits your project's scope.I've recommended this elsewhere, but page 20 of this book has a clever design for a 4-unit + live/work, whose construction can be financed with a single-close conforming residential mortgage. http://www.cneinc.org/missingmiddleNote that there's residential on the back of the ground floor; some zoning codes don't like this, but without it you'll have to build an elevator, which raises costs substantially.

She has a loyalty to her stepdad I guess and I won't dive into too deep but I guess she'd feel guilty for leaving his brokerage since he isn't doing as well as he used to.

We keep 100% of the late fees and there is a substantial thread on here about whether PMs should keep the late fees.

All are things you will want to discuss before diving in!

I will do this both to help me really understand what the book covers as it will force me to deep dive into the book before I post a summary, and also perhaps to help someone else who might read the summary get excited and want to learn more.