I have the option as well to adjust the interest rate up in 5 years but not down.

@Trevor Lohman - Yeah, the type of home assisted living I am wanting to start does not provide trained medical care such as nurses but individuals that have been certified by Colorado (QMAP) to take care of individuals in need.

I will say candidly having done a significant amount of data-driven research of various financial instruments (including RE), that Cash Value life insurance more than holds its own, especially on a risk-adjusted basis. 

Additionally, any advice or recommendations on adjusting my approach to marketing or pricing would be greatly appreciated.Thank you in advance for any insights or suggestions you may have. 

I am not saying this the approach that should be used, just saying there are a few levers that can be adjusted depending on what your overall goal and financial situation is.

The roof now has an adjusted tax basis of $400,000 (due to depreciation over the years).

The new appraiser won't make any adjustments so we're calling a new appraiser to get the value of the home up so we can pull some more money out.

Risk adjusted go to $270,000?

If it's truly a full gut rehab, I recommend starting with a self-certified architect. 

He just needs to adjust his price/sqft for doing more than a typical contractor does