Need a bit of help planning my first investment deal (Poke holes please!)

[Ed Dunbar]

Hello. Hoping to get a bit of info on how/if others might proceed. The moving parts of taxes and finance make my head hurt so I figure I'll ask folks with more experience. 

Home we'd like to buy

Asking: 430k

ARV: 465-490k

Now here is where it gets confusing. We are in our primary residence but want to move out of it to rent it out as we have significant equity and it would cashflow really nicely as a STR through a PM (may self manage eventually but to start it will be nice being hands off).

The home we are looking at would require pretty significant renovation (35-50k). We would like to treat it as a live-in and rehab and eventually (3-5 years) either sell or rent it as a LTR. 

We'd like to go after this house at around 315 as the initial offer. The sellers are aware that 430 is much too high so I would expect a counter. And yes, I am aware that 315 is quite low, but with this home I think its the lowest price we could offer that would fetch a counter offer. The home is currently rented at a ridiculously low rate for the next 6 months which is part of why its still on the market. The owners are older and simply looking to unload the thing. 

Now, my questions. We currently have about 300k equity in our current home, 45k liquid we could invest in a home without touching emergency cash reserves. Primary home rented out will 10-15k/annually; up to 2x that but I'd rather calculate this on the really low end.

Knowing we would do an initial rehab of the major issues (appliances, floors, kitchen, windows, doors) and then move in and do the rest of the rehab over time; how might you proceed to maximize tax advantages and obviously maximize income while minimizing expenses? 

Also to note; this house is only a few miles from our primary residence but in a different zip code so figuring out which home to declare as primary and which to be the investment home is also a confusing part. I've run the options over in my head several times so getting them out here and getting some input would be super helpful.

We are open to a HELOC but figuring out what/how to deploy funds is confusing.