In the near future, rent is going to eat most of your money every month. 

Time is money.... you may be able to fight this legally but that will take even more time and more $$ and in the mean time you can't sell it.....Eat the $$ to re-do the floors and move on..... that $$ loss will be less than the legal fight that you may never even win and all the loss from a delayed sale

If you don't have much equity, the mortgage will eat up the cash flow.

What I like about the previous lay out is you don't have long hallways eating up space.

So that eats up whatever CF you thought you had. 

Obviously I’m a little biased, but I eat my own cooking.

as a new agent you need to decide where you will hang your license,(broker), you dont work on your own, part of the idea is than an experienced agent will over see you and help you work,there are many companies out there, interview with a few, let them talk, most would rather hear themselves anyway, steer clear of more independents that boast letting you keep more, not for newbees, i started out with national chains till going to remax after many years, the chains will will have additional training for you, I also mentored two other agents after hitting elite status on nationals, be ready to give some of commission for mentoring, dont volunteer it up front, you will have many fees to pay starting out, sometimes you can also be an assistant to a major agent too, you will list thru a multiple listing service that other agents used to find houses, public too, they cost also for membership, on your own you cant list on craigs and do open houses, there are some who only list and some who only sell, and some inbetween, if you are lucky enough to get both sides, suggest you get someone else to take buyers side for transaction if you have iron clad relationship, or stay neutral, some list only to take buyers elsewhere, one house one sale, one house many buyers, what ever you do stay intouch with listings, plus with national agency lots of experience, lots of ads, national website, referrals,traing avail if you got in this to work from home and make a large commission right away you got sold, fees will eat you up, sales take time, money and experience, some get in it to buy their own, that is an option too, do lots of phone time, stay friendly with all in office, avoid politics of all kinds, do rentals to pay the fees, they can  turn into buyers, expect to make first listing within 3-6 months, sale 6 months, till up to speed, my standard was 2 of each a month, some more some less depend on season, can tell you stories.... doing floor time once had buyer walk in, said wanted to spend no more than 2, turns out was million, no one wanted to do floor time, also my first listing was a real frank loyd wright home, other agents would me give their rental lookers, be willing for all, I worked in area of NJ where a famous golf course is, was one of few that belonged to all 3 mls, so had advantage, a $1500 corp rental relocation will some day buy, get to know the relo person, we used to give nice gifts to clients, make it something they will see everyday not flowers or candy

No eating out, no travel, no gas and other expenses are reduced.

I'd rather eat the 5k and have it ready when something else invariably goes wrong.As @Nathan G. said, it's probably better to list, market, show, explain, and legalize that it is a 4 bedroom -- put some safety measures up there anyway, like smoke/carbon monoxide, do window guards, fire extinguisher, all those items should be $75 to $100 -- and then go from there. 

People need to eat--that's number-1.