HELP: HUD 203k Rehab on Single Family Owner Occupancy - Advice??

[Brandon Sok]

HUD home built in 1900 in nice historic district of Ohio town. Listed at $70k then dropped to $63k. Contemplating a bid of $55k. ARV roughly estimated at $130k-$150k. Extensive repairs needed, estimated between $30k-$50k. Annual property taxes of $800-$1000.

Strategy 1: Buy, live in/fix up, after 1-2yrs move and rent it out ($700-$900 per month)

Strategy 2: Buy, live in and Fix up, Sell after couple years.

I trust strategy 1 the most.  What other options do I have? Thoughts on quality of the deal?

Any advice or warnings for 203k loans and repairs?  I've heard bad reports about excessive expenses because of required use of General Contractors.  Does anyone insight into the process and expenses?

THANK YOU!