BRRR for mid term rental- add bedroom?

[Heidi Kenefick]

I'm in the process of buying a very dated large house in a nice neighborhood. It's a 4 bedroom 2 bath and has a eat in kitchen, den, living room and formal dining room. As well as a sun room. I am considering adding an extra bedroom, and doing rent by the room for travel nurses or trying to get long term tenants through a program like HUD-VASH. Based on what other mid term rentals go for I should be able to get $850/room.

The house needs a lot of updating- new bathrooms, kitchen, paint, floors…I spoke to one contractor on the phone who thought it should cost about 30K for what I wanted to do. Another contractor went out to look at it and suggested taking down a wall to expand the kitchen into the dining room, not add the extra bedroom, and thinks it will be closer to 60K.

I’ve reached out to a few other contractors but haven’t heard back. Guess that means they are busy!

Guess my question is do I spend more on the kitchen and bathrooms to make the house look great, and hopefully appraise higher so I can get the money I will spend on the rehab and down payment back out, or should I add the extra bedroom, do less of a rehab in the kitchen (ie- paint instead of replace cabinets, leave the wall up), but potentially have more cash flow?

Numbers- purchase price is 230,000k with a 15% down payment (34500, + cc about 10k).

Mortgage estimate is 1500/month.

Expected for electric/water/internet/lawn/cleaning ~400/month.

Rehab costs (still figuring this out) but somewhere in the 30-60k range.

Income: Rent @ 850/month for each room = 3400

This is my first BRRR and also my first mid term rental, and it is out of state (in a place I used to live).

Any advice or encouragement on this much appreciated!!!

If you are curious to see the house the address is 2771 church St winterville, NC. It’s on realtor/Zillow etc…