Even if you are keeping commercial sometimes retrofitting an existing building can be more costly with money and time than just tearing down and building new.

And generally, those are the same folk who already know how to create more wealth out of their existing wealth.But when starting out, (having "small pockets"), a positive cash flow model fits the bill for the main BP audience.Nonetheless, a search around BP will find very many posts recommending buying for appreciation/negative-cashflow rather than no-appreciation/positive-cashflow.

Hardwood is great for rentals because of the durability so I'd sand/re-condition the existing floor (if it's in decent shape).

Put it down on a portfolio investment or use it to pay off existing mortgages? 

Congratulations, you've found one of the best online communities and REI resources in existence! 

Your are buying/financing an existing business (even if you live in it), so it already has income/expenses that will be considered.

If you post the existing size of the house this will help us better give you a ballpark number.

I do plan to potentially venture into new property development deal down the road, but for now I'm focused on purchasing existing properties.

PM me about a monthly meetup that exists.

Option 1:  Spend $50,000 on a conversion from a huge basement garage to a mother-in-law unit that would increase your rent by $500 per month on an existing rental.Option 2:  Spend $50,000 on a down payment on your next deal that should cashflow $200 per month after expenses, in addition to the loan paydown, appreciation, and tax benefits.