@pinkowl we took on a doer-upper as our first purchase. It took us 2 years pretty much to the day to do it and whilst we don't regret it we wouldn't do it again, certainly not living in it at the same time which we had to.
What I would say is do not underestimate how much work needs to be done. Similarly to you, with horrible wallpaper, artex ceilings etc, we thought some of the work may be cosmetic. In the end it was easier, cheaper, quicker and provided a better end result to strip literally every room back to brick, joists and studs and basically start from scratch with new plasterboard etc.
Doing the work yourself is exciting for the first 6-12 months but then becomes very tedious, difficult and time-consuming. We did a lot of the gutting-out ourselves, getting through half a dozen skips for a 2 bed, and got pros in to do most of the rebuilding. We had to replace the bathroom twice because the first time I did it, and whilst it was fine to the untrained eye had problems behind the scenes.
We also did an extension on the kitchen and all the while were living in around everything. At one point our spare room (pre-being ripped out) was our bedroom, living room and kitchen, with a mattress on the floor, TV propped up against the wall, cooking on a two-burner camping stove and washing up in the bath. That followed having a portaloo for a couple of months and having the shower at work. Needless to say it's not easy! Living in it also means you do things in a very cost-ineffective and time-consuming way. For example, if you weren't living there you'd rip everything out in one foul swoop and then get a plasterer in for a solid month. Obviously not possible when you need at least 1 room to live in.
You also need the funds to support everything. We spent about £70-80k (lost track tbh) and we used savings, bank loans, credit cards and family loans and repaid it all off when we remortgaged. 25k of that was the extension (not including fixtures/fittings) but for a 3 bed in the same state as ours I'd say you'd need a minimum of 60k to do a basic job.
Not trying to be too negative! We don't regret it at all as it's got us to where we are now in terms of equity (we're in the process of moving on) and probably allowed us to skip at least 1 rung of the ladder.
Let me know if you've any Qs!