Considering that, you are likely going to see appreciation year over year, which essentially will be additional equity you'd capture just by simply living in the home. 

I've owned the house for few years and have spent a lot of time trying to design an addition to add value to the property, but the current floor plan is really not conducive to realizing a return on that investment (tiny living room, low ceiling basement, poorly placed basement stairs, etc.). 

$25k is only 4.16% of your new purchase price, heck of a deal.Thank you for your service and let me know if you want to talk any more details and run actual numbers based on your situation.

Thanks for any additional input you have time to put forth. 

I currently have a homeowners plan with Allstate and plan on asking them if they have something like a short term rental rider plan that I can add in addition to my current plan.

That could be achieved without spending an inordinate additional amount in cap ex; In fact all I have seen had these items in common1.

Loss of use is foryour additional expenses if you can not live there due to a covered claim (ie.

You'll want to incorporate interest costs on the HELOC while you're using it, but that will add to your holding costs in addition to utilities, closing costs, etc..

The utility company doesn't manage your property...they provide paid services until they're not paid anymore. 

Risk that the IRS will challenge it, which is far more likely than with a full-service professional report3.