Mixed-use in a small town

[Jason Turgeon]

Browsing Craigslist real estate ads, I found something interesting in a small town in NH about 3 hours north of me here in Boston. I have family nearby and know the area pretty well. It's an economically depressed town that has seen some really hard times. It has had a little bit of stabilization the last few years (I wouldn't call it a comeback, but the downward slide seems to have stopped). About a dozen rental units on the market on Craigslist and a couple of local property management companies to use. 1 beds are $550/month with heat included, 2 beds range from $625-850 (some listed at $1000 furnished), 3 beds about $800, one larger management company that lists about 75 units on its website only has 1 vacancy currently. 

I'm looking at selling a 2-unit rental I've had for about 10 years and doing a 1031. I will have about $200-$300k in cash and will need a property worth at least $325k. What I've found is a 36,000 sf mixed-use property, all-brick, built 1914. 7 huge garage bays in 2 separate wings of the building, a storefront that needs serious work, one finished 2-bedroom apartment, and 2 upper floors that are completely gutted and ready to build out. 6 electric meters in the photo, likely shared oil heat for the whole place, all new windows, new roof, new sprinklers, masonry looks OK from pics and street view. 

Asking price is $259k and it comes with a fair amount of garage equipment and tools that are of interest to me, plus the furniture in the 2-bed unit. And the owner is willing to finance 10 years at 6% with $100k down. It's in a mostly residential neighborhood with a few businesses and non-profits nearby and about a 5-minute walk to the small downtown area.

It's a cool old building. I am guessing I could make some big open-concept artist loft spaces on the upper 2 floors with exposed brick, etc., and get $800-$1000 per unit x 4-5 units. Nice thing about lofts is they don't cost a ton to build out. There's also a serious lack of airbnb in this area and I would want to keep one unit for myself for visits to family and try the airbnb market out with that unit when we aren't using it. Garages are a total guess but they're huge spaces and somebody must want them for a reasonable rent.

I've asked for more info. Am I completely insane? This would be a huge step up for me (going from 3 self-managed units in walking distance to this beast 3+ hours away). What are the big red flags I should be looking for?  How do I even begin to go about estimating costs to build out something like this?