I already know that in C class housing this is pretty much the deal and choosing wisely the upgrades are important.

@James Wise Wow thanks.

You are wise to add a bathroom. 

Thanks @James Wise! 

Secondly I will say a cash out with a 625 credit score will be very hard on your rate wise especially for a multifamily home, might want to work on that first because you are looking for a jumbo loan and they require upwards of 660+ normally 720+ credit score.Since you have a good income already, might I suggest you take out a personal loan and consolidate your debt first to raise your score.

Do it wisely, but DO IT.

@James Wise I think so.

Typically more regional sized lenders are the ones providing more options program wise, but it only takes one local community lender with a good program to make it work. 

This on is not a good investment income wise, speculation wise it is always a crap shoot best left to markets that show consistent high appreciation.

Attorney's can do 1031s but most do not or if they do they only do them occasionally so you do not get the benefit of scaling volume price wise or experience.