And, comparable sales are then adjusted with the differences in the subject (proposed) property being made against the sold prices of the comps. 

There's a reason folks that analyze risk for a living aren't super hyped about what you propose to do as a first-timer.

How much higher is hard money rate being proposed compared to current rate?

What terms has the owner proposed for the seller-financing?

I'm also unsure what offer to propose to the seller without offending him and telling me to kick rocks, but I also need to give myself enough cushion incase it needs a lot more work on the inside than what he's telling me. 

@Robert Gilstrap  What you propose is a legitimate strategy. 

These efforts have shown decent promise, and there is currently a proposal to expand the program to the top 20-40 cities nationwide. 

A source I use to budget my projects is RS Means but the annual subscription is fairly expensive if your only looking for rough numbers one time.I recommend contacting 3-4 General Contractors in the area and asking them to give you a proposal to finish the work. 

I proposed it be converted to a provide office, which I'm already using it as, with the bedroom being the office.

However our broker had a similar situation go down in a deal on another transaction and after thorough investigation come to find out it was simply rumors in the community because they weren’t excited about the proposed use of the property.