You shouldn’t need an architect unless you’re raising the roof or redesigning most everything.Start looking for a well-recommended GC who can walk through and see what you’re thinking.

And his rent covered my mortgage with just a little left over each month.

The rent from the 3 rooms more than covers my mortgage and utilities. 

The roof is at the end of its life so in the next year or two we will have to spend another $8,000+ on a new one.

As far as 10% interest and 3 points vs 13% interest is concerned, covering their bases, TVM, etc.2.

The lender will need to ensure your net operating expenses can cover the debt and they can't establish that without solid financials.  

How old are the furnace, A/C, roof, etc.? 

It was not an easy one, since we are in CA and the property is in OH, but we made it through and are looking to take on our next project.Bought: $79,900Initial budget: $65,000Real budget: $97,000 (mismanaged project by initial contractor (and second contractor))ARV: $219,900Improvements:Brand new siding on the second floor (was not in the initial budget)New roof (was not in the initial budget)Sealed and painted the basement - was quite creepy down there beforeOpened the floor plan from the living to the kitchen by widening an existing walkwayMoved the kitchen from one side of the house to the other to capitalize on the stained glass windowsGutted the upstairs bathroom and added really good looking featuresAdded a half bathroom and laundry room downstairs by the entry to the backyardNew ACNew plumbingNew electricOur contractor performed extremely poorly on this job, and I am happy to share a cautious word with anyone who aims to invest in Cincinnati about the team at Kaiker Development and Creative Customs Carpentry.

Enough to cover you for a complete loss and potentially getting sued for numerous reasons.  

@Benjamin Black I think you can find a Kender that can do 80% LTV which should cover consolidation and also closing costs.