House Hack Question!!!

[Vanessa Lackowitz]

My husband and I are thinking of house hacking one of the last non-renovated homes in a very affluent neighborhood. It is going for just under 200K and will likely need another 200K to bring it to its full glory and add an addition, home was built 1850s, but was lived in as recently as last year. Renovated homes w/o additions are going for 525K, those with additions are over 600K. With equity and some time we are thinking we will stay there 3-5 years and be able to sell the property by then for around 700k if not more. 

I understand many people are intimidated or turned off by such a large project, full gut reno plus an addition. I also understand if it a BIG investment putting 200K into a property. However, if I am going off of the ROI, wouldn't this be well worth the headache of 6-9 months? The other thing to consider is that the city I live in is really incentivizing people to buy and renovate the old houses so even though it is in a historical district you cant go a block without seeing another renovation happening- the city is really pushing permits through faster than one would expect.

Advise!!!

THANK YOU ALL