A typical percentage of a property value that is allocate to land value is 20%, or in this example, it would be $200k.

The other thing I think is worth mentioning..and I don't know how large this project is, but have you entertained getting a bridge loan that incorporates some of the rehab funds or maybe all of it (again, depending on scope of the project), rather than tying up or allocating potentially all your cash into this project?  

You can allocate the cash proceeds anyway you want (and of course you've got your savings but I'd recommend keeping at least some of that available as a cap ex sunk fund). 

By allocating the common areas by the number of people method(4/6), and excluding hallways and stairs as allowed, setting tenant rooms as 100% and landlord bedrooms at 0%: I get a business use figure of 68.5%.

You're at $350 already, though, and I'm not sure you're allocating enough for capital items (that roof has to be replaced before you sell in ten years, which is about $40 a month by itself.)Applying the 50% rule of thumb, assuming 25% down plus the $2000 out of pocket, 5% for 30 years, I get $311 for P&I.

ORAm I forced to allocate the expenses according to the proportion of the house that is rented vs. the proportion I live in? 

As an investor, it is comforting that a company is diligently putting opportunities in front of you so you can decide how and when to allocate funds on your next investment.

Every cent you have allocated to the seller must now go to the next of kin in line to receive the proceeds.And I respectfully disagree with @Pavel Sakurets .

Some people put more but it's up to your risk tolerance.Assuming you will self manage this property, still a good idea to allocate 10-12% for property management.

@Polina Goncharova - as an accountant, you should know about Schedule E - look there and make sure you have allocated for all allowed deductible expenses; they're deductible because they will be incurred in the course of doing business as a landlord.