Hmmmm, hard to say without actually viewing the properties.
One is $80,000 more than the other...I guess you have to weigh up which one is going to benefit you most in the long run, and what it is going to really cost you in the long run....eg. mortgage interest etc etc.

I guess No.2 would be my choice if I could afford it, as the "unfinished" portion of the house can be done by myself.......so I guess you have to work out the additional costs of doing that using builders if you are not capable of finishing the home off yourself.

On the other hand........would $80,000 put toward House No.1 bring it up to the standard you would want in the end ?????

I guess you will have to do a little maths.