This is Called GAMBLING.

As a contractor I always prefer a full gut but it does eat away the rehab cost and takes longer but no stress about plumbing, leaks, electric, lead paint and etc in the future.The patch up would cost less, fast timing, but then you are gambling with what's behind the wall and hoping nothing happens in the future.I assume most house that are purchase for BRRRR purpose are in distress/bad condition and old on some occasion.What rehab number would you go for?

Sounds like you did not do any homework and its going to kick you in the butt and it sounds like you gambled on this one. 

Definitely up, so the gamble on rates cannot go your way.I had one ARM in the past, and it went my way when it adjusted, but only because the market collapsed.

@Harry Gamble The cost of insurance will vary greatly based on the individual property types, specifics, and locations.

I believe your point was more about if you are a W2 and expect retirement savings if you are lucky with your 401k to get you to where you want to be when you retire then yea, that is taking a gamble given the access to wealth building vehicles that are possible in today's world.

It's gamble that's worth it at the price they've bought it at.

Investing is not gambling.  

Let me be real clear that this property was so unique that it would be a gamble as a flip, so it only made sense if we were going to either a) live in it or b) rent it or c) do both, live in and rent it.

Only the most desperate renters would probably agree to live there so the price of the property would have to be dirt cheap and cost you as little money as possible in the rehab to make it worth the effort.Your gambling that the surrounding area will be gentrified in the next few years and increase the property values.If this was in Southern California I would say yes absolutely but,the ATL may be a little harder to wait for unless the population booms there in the next 5 years.