As a Real Estate investor who is originally from the Los Angeles area, a piece of advice:
If you own any Real Estate free and clear of a mortgage in that area, KEEP IT.

To finance the project, you might want to consider a HELOC (Home Equity Line of Credit) which you can walk down the street to your local bank and get.
This is like having a credit card for what is probably at least $500,000.00 (the equity in your home), except that you only pay better than 1/3 of the interest you pay for normal, “unsecured” debt. Use the home as collateral.
The payments will be very low on a loan for $27k secured by a home worth over $500k (obviously, right?).

Since you are there to stay, you can and your family enjoy the upgrades in lifestyle, and your heirs will appreciate the upgrade in value.
Good Luck!

Home improvements are always a plus to the value of your home. It makes it different than everyone else. Paying for something in full is always better then paying installments unless you cant wait and there is no interest.

Depends on resale value in your area. If you can recoup the cost of renovations in two years upon resale then it might be worth the effort. Other wise forget it.

Depending on the value of your townhome, that kind of investment will usually pay a return in 5 years. It sounds like it would be a great investment to make your house a home.

Of course, if you can save the money first, that will save you money in interest (and you could spend more $$ on your house that way). You could also use that time to plan out your remodel strategy and find good deals on the materials you want.