Validate zoning, potential special or use variance, future zoning map, neighboring zoning.

mortgage principal will remain in the future

I purchased it for my future grandkids.

Use this partnership to ask questions and talk strategy about where you want to end up in the future as an investor.

I would consider partnerships in the future.

Any advice on how to get rental income reported (from the current rental property and future income from renting out our primary residence) and lower the DTI??

I would gladly invest with them again in the future!

Let me know what you end up doing, seems like he has a bright future.  

As for getting a HELOC, it's prime + index (fluctuates based on the market), so to answer your question, if you are able to qualify by yourself, then it's always a better option to get a loan solo, then use your spouse's income as a backup for future investments. 

Save for future expenses, especially if self-employed6.