By improving the quality of apartments and applying the deferred maintenance that this building has been lacking, I should be able to get market rent close or at $525-$550 a month.There was a half-done converted apartment in the basement.

If paying utility is uncommon for the area then you have a building that just hasn't been converted yet.

The Land Contract must somehow be converted into cash in order to complete the investor's 1031 Exchange.

Basically, we want to convert our appreciation play into income play.

Anyhow, this is maybe slightly off topic as it's dealing with my personal home rather then a rental property, although I do plan to convert this home to a rental within a few months or year at most.Background is I owe about $218k on the property, it's zillow estimate is about $212k, but i had a Realtor take a look and they recommend if i wanted to try to sell it (i was looking at options) to start at $240k.

Or does subdivision required converting lots to buildable residential lots with utility service hooked up?

I have a 91 Mustang 5.0 convertible I have had since college and it was my daily driver for year.

You can convert an investment property to a primary residence and take advantage of benefits of the section 121 exemption for primary residences but there are limits, restrictions, and caveats. 

As a realtor that owns buy and hold properties do you market to your tenants, try to convert them to future buying clients?

Convert the permitted 1bed/1bath living space into a Junior ADU by permitting the kitchen (as-built permit).