Check into your state real estate laws about this.
Here in MN you can't just buy a house and fix it up and get a loan for it - if you pay for it in cash or total amount you can. But the banks won't finance unless you can move in there in 30 days and its livable!
We learned that when looking for a house. We had found a house that had to be fixed up; was willing to do it (DH can do ANY thing
), and we qualified - price wise.
However when we talked to the loan manager, she asked us (before they went to assess it for value) "can you guys move in in 30 days? Is it livable right now?" - we told her no, we wanted to buy it and fix it up.
She said that it was against MN law to do that now. So when we found our present house, first question she asked was "can you guys move in?" - we told her "oh yes, no problem with this one"
Also DH just told me for you to check zoning laws - if its zoned for commercial you may not be able to convert it to a residence.