Old Tile Ceilings and Paneling

[Cale Snyder]

Hello everyone! I am in the process of closing on my first flip in Chesnee, SC and have a dilemma I'd like to throw out for opinions. 

The house is old. Built in 1900 old. Hence, it has some really neat character to it yet has had some fairly recent updates (cpvc plumbing, updated breaker box, relatively new roof) and its bones are good, but it has some cosmetic issues that need updated. Most notably old paneling (the real wood kind, not the cheap thin kind) in what will be a bedroom, and the old, possibly asbestos, ceiling tiles in each room.

My current thoughts are to drywall over two out of the three walls in the bedroom (a new wall will be installed on the fourth wall for creating a new 3/4 hallway bath) and leave one wall with the paneling to paint over and act as an accent wall. I'm mainly doing this to because I feel it would look odd having the new wall being drywall with the other three being paneling, but to minimize cost and have a possibly neat accent wall. The tiles I will just paint in a semi-gloss white so they blend in and aren't as noticeable/dated.

So, what are your thoughts on these issues? Should I leave all three walls as paneling and paint them, drywall all three walls for consistency, or go with my current plan? And should I tear out the tiles and drywall all the ceilings, cover/replace them with the decorative plastic ones from Home Depot, or paint them like I'm thinking? Or do you have another idea?

Some more numbers to help if needed:
-purchase: $20k

-estimated ARV: $90k

-reno budget: $40k with 20% built-in contingency on current plans

Open to any and all thoughts! Thank you in advance!!