This is a promising start for a good horror game! The setting and mood of the game are appropriately creepy. The red overlay and the noise will be excellent when you guys add the entity; it'll be nerve-racking!
My very humble suggestion might be to have a simpler control scheme—perhaps a single interact button for every action. I can see myself getting a bit flustered trying to hide from the evil entity, only to get confused at the controls for a split second and die because of it.
Other than that, it looks really promising! Keep up the great work!
EDIT: Also, the concept art looks sick! Cool stuff!