My only point is unless you can see the future all you are left with is making choices that improve your percentage chance of success. 

Acquiring below market and implementing a value-add improvement plan will result in a portfolio of properties that appreciate over time and that also offer significant tax advantagesPick the right market – not all housing markets were impacted in the same way during the last recession.

The important thing to point out is that like you said, this job made it a full bath, which is an improvement/addition, not a repair.

My Business partner wants to move in and we can improve it while we house hack it.

Do investors commonly make capital improvements to boost the amount they are eligible to borrow against?

I have seen up to a 100 point score improvement on some files.

It seems like a lot to someone who is trying to save that on their own from their day job to improve their position, but in all reality, you can make a great ROI on that money in real estate if placed correctly.

Nothing wrong with a two-story but the preference would be a single level to be more rentable.You may want to improve the property while you live there also, do so cautiously and with the intention of making it a better rental property.

There is always something.Why do you expect an ARV $5k higher than what you paid with no improvements?

The leases the tenants sign have a clause stating the landlord reserves the right to make improvements on the property and the construction will be during normal business hours.