Need help determining the best scope of rehab

[Jeffrey Dorman]

We just bought our first investment property, a large 2700 sqft two-family, 2 up and 3 down, in the village of Hoosick Falls. It was an REO deal and we got it for a good price, but it needs a lot of work. We are struggling a bit on deciding the scope of rehab and whether or not to convert it to a 3 or 4 unit (requires a zoning variance). Our goal is to do a full-gut rehab knocking out all the major capital expenditures and having some units that are a little above the average for the local market. Our preliminary rent expectations have it cash flowing well, even as a two-family, but the ARV is a bit more in question. There is nothing comparable that has sold in the last twelve months to support the level of rehab we are going for and would enable us to refi and get all, or close to all our money back out of the deal. If we expand the search to the Troy area, there are a good number of comps that we could use...would appraisers go for that? We could go for commercial financing as it would be around a 1.5 DSCR. Any local investors have some thoughts or suggestions that could help us? Any local investors available to provide some mentorship and possibly meet up to go over the numbers/options?