The only other option that comes to mind is to make the improvements and try to achieve favorable rental rates to push the story that 2 BR homes rent for a premium because its unique.

I need to redo the roof of the house lift up the second floor, the entire front deck of the house, demolish the old stucco, And replaced a lot of rotten wood and messed up beams.does anyone have any recommendations? 

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.  

Secluded in the woods, but still close enough to town.How did you find this deal and how did you negotiate it?

However generally from working with 2-3 other PMs in the west coast, I am 100% fine paying more of a premium each month for a PM that is transparent and is able to give more time to communication.

@Glenna Wood, They're actually in conjunction with a 1031. 

Also, from what I read in Bloomberg, midterm rentals near major hospitals can sometime command a decent premium.. especially if they include some nice furnishings.Little Tweaks Count: Even minor upgrades, like new door locks or a fresh coat of paint, can help you justify a stronger rent.Driving for Dollars & Networking..

In a lot of sections of the house this was a good thing because less drywall work, but there is one room that has old wood paneling that was severely warped.

As mentioned before too, newer construction tends to sell at a premium too. 

Buying a large new build home can also work well as a house hack as you can charge a premium rent, and generally most bedrooms built now a days have en suites (at least in my market).