Highest and best use for a Historic 5B/5B home

[Nathanael Tinaya]

Hi. Newbie investor here. Brainstorm with me!

What would you do?!… 

A seller financed, red brick central Florida historic home, built in 1923, in an established Historic neighborhood (5bd/5ba, 4,000 sq ft) on a double lot with a detached garage and second floor apartment above the garage. Neighborhood was home to mayors, governors and other elected officials.
For sale by owner, on the market for over 340 days.
Seller is asking $825K, but could potentially be negotiated down to $650K-$700K? He'd entertain a one year contract followed by a balloon payment, structured into a typical mortgage. Kitchen is updated, however, electrical, plumbing, roof is not. ARV could be anywhere from $1-$1.5 million, depending, maybe more?... Located in an appreciating market.
Location is near downtown, with great restaurants nearby, museums (specifically a world famous architect), a level 2 Trauma hospital and 3 different universities. City is growing.

Given no issues with permitting, management or funding, how could this be a profitable investment? 

What value add projects would you do to force value?

Would you add a nice, luxurious pool? A duplex (if allowed by code)?
(The city is favorable to STR/Airbnb.)

Airbnb? 

A boutique boarding house for single, working professionals?

What would be your strategy?

Excellent general contractor and property management team available. 

Trying to explore RE investment options that would produce solid ROI. Thanks for reading and sharing your input! Many blessings to all.