The house needs a lot more work other than putting a downstairs kitchen in, like roof, siding, etc. 

But when you have to fix toilets, repair or replace leaking windows and roofs, repair or replace the floor damage from the aforementioned leaking windows and roofs, tenants destroying appliances,..etc. on top of all the land expenses your Op Ex will increase significantly.

It almost always costs you nothing (seller pays traditionally) and will educate you on the market(s) and tenancy profiles. 2) Buy a property(s) with long term (10+ year lease);3) Look for corporate credit rated tenants (think Walgreens, Starbucks, etc) on a Triple Net (very minimal LL responsibilities- think roof & structure) OR Absolute Triple Net Lease (no landlord responsibilities).4) Most credit tenants are experts in location selection (which again, minimizes your downside risk).... but as a rule of thumb I always prefer locations on traffic lit, hard corners with great/easy access and high Vehicle Per Day counts.My 2 cents.  :-)

Also, in terms of the cost, we want to cut down and looking for options like bump-out which could cost us less since it doesn't involve touching existing roof and foundation and use this bump-out to add the bathroom.

All with new roofs in past 3 yrs.  

Also, in terms of the cost, we want to cut down and looking for options like bump-out which could cost us less since it doesn't involve touching existing roof and foundation and use this bump-out to add the bathroom.

I gave too much control up without having worked with this guy before, and several aspects of the construction work went off course, including the kitchen design and color pallette.

Myself, I have almost 3 decades in the housing industry professionally, I have performed at the highest level of skill, licensure and quality in literally every single aspect of real estate from point of raw land planning and development, building design, build, renovation, remediation, inspection, investing, contracts, negotiations, deal engineering etc etc, I am ridiculously over-the-top experienced and qualified and that is why clients go with myself AND my team, it's not my beautiful Shrek like smile, it's my beautiful brain and decades of knowledge and performance because they know any issue that could come up, I have probably dealt with it 18 times before if not 180 and I can solve it.

My capex budget includes, roof, floors, hvac, appliances, hot water heater, exterior paint, bath and kitchen remodel, etc.

Always shoot for that win/win scenario but at the end of the day if you don't own the property (Or should I say control the property) you are giving up a very valuable aspect of real estate.