Advice on 203K loan - pros and cons and which type

[Satha Palani]

I have an offer in on a duplex in an up and coming part of the city. The house needs work and is being sold "as is" The plan is to live in one unit and rent the other one out. At the prevailing rate, provided the cost to fix is does not exceed 110% of what i have budgeted, the rent will pay off the mortgage. The house needs both baths and kitchens to be remodeled, some electrical work, windows to be repaired / replaced and a new HVAC system. Currently it has oil furnace heated radiators, which by the looks of it is not functional. 

3 questions:

1 - Any thoughts on whether i should go with the streamlined product (35K max) or the standard? I have some reserve cash that i would use to supplement any repairs beyond the 35K mark. Is this a sound strategy?  Can i even qualify to use the streamlined if I am replacing the HVAC ?

2 - Since the house is being sold as is, is it worth getting a regular inspection on it? Also, should I hire a structural engineer to tell me if the structure is sound?

3 - Thoughts on hiring a FHA consultant to do the inspection. This is more costly then getting a regular inspector and not required if i am using the streamlined product; question is would I be saving time, money and effort by having a report that tells me what to fix such that I meet the FHA guidelines?

Here are the numbers:

purchase: 97K

Closing and others: 6.5K

Renovations: 40K

Down payment: 10%

monthly loan service (net of tax and insurance): $581

A nice 2BR/1BA in the area will rent for $750. 

any and all help is greatly appreciated.