I would say no unless you can confirm that the building department will provide a permit to add the rooms and your calculations are based on the ARV equity wise.

The downstairs powder room should also go down to the studs.

If the deal had more wiggle room i would say put it under contract and worse case scenario wholesale it out if you can't get financing but the numbers are pretty tight on this one You are at about 77% of the ARV with all in costs most lenders will only go up to 70% to 75% max at that leverage point you will probably see a 90% LTC offer

With IB being so geographically isolated I question the room for employment growth that will bring opportunities to the area that would facilitate the change into a trendier beach town.

Another idea I have is buying a SFR with a legal attached apartment and live in the apartment while renting out the majority of the house seeing I don’t need much room.

I just closed on my first property (R1 with a ”rec room” in Torrance, CA).

A few years of higher than average appreciation is small potatoes in the grand scheme you know?

Use a air handler unit in each room.

There is healthy cash flow, but there’s room for a few improvements that would increase rents. 

I am choosing to stay away because the ARV is only around $45-$50,000 so there isn't much room left to fit in fixing the foundation.