What you are talking about will work. You only have a generator putting out 20 amps so if your neutral is 12 or larger the unbalanced load should not exceed the wire capacity. Would I do it. Maybe. Also where are you putting the transfer switch and what size is it? I have wired hundred of houses and put power on everyone of them to check out the 120 volt circuits. I just had a breaker I installed in the panel for this and a jumper wire between the 2 lugs on the breaker. I used a breaker because I wanted to be able to disconnect the gen power if there was a problem. Of course there was no power on the house and not much of a load since it was an empty house. I would go ahead and put the transfer switch in and then install the jumper and if you go to a bigger generator later with 240 volts remove the jumper. As long as your cord is rated 25 amps or more the neutral should not be a factor on a 2500 watt generator. Unless you have multiwire circuits in the house then the neutral wire becomes a factor in the house wiring. With the panel cover off you might be able to determine if their are multiwire circuits. Real easy to do if it is wired with Romex. Romex multiwire circuits will be 4 wire cables entering the panelboard red, white, black and a bare ground.
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