If he does the Dremel work himself (cutting out the magazine well bars and cutting the butt stock off of the lower, the rest of the parts cost would b the same. Easiest things to replace to comply with 922r is: trigger, sear, hammer, cocking handle and you would have to replace the buttstock and forearm that are on there with US parts. If the lower couldn't be salvaged or you don't want to mess with it, you can replace the lower and keep one of the other parts in there.
When the pistol and rifle were both available at the same price, the pistol was a no-brainer. Now with the limited supply of pistols and their price premium, there's definitely some money to be saved by converting the rifle.
If your end goal is an SBR, I would recommend looking at a BMP painted upper, building it out as a pistol and then throwing a stock on it when your Form 1 comes back. If you price out the parts you have to replace on the MKE to get it compliant as well as the $250-ish for the cutting, threading and 3-lugging barrel, you could probably save a decent buck.