Then sell the property and start doing fix and flip or fix and rent. ( I prefer to sell this property as it 100km away from my student rentals. ) Not sure if I should renovate the lower unit to sell.

Often people overthink this.

My question is, since we may not need to borrow anything to finance this, will the mortgage payment be affected? 

--Did you even stop to think this through?

This has been happening in Troy, Birmingham, Royal Oak, etc. for years now. 

Just adding a little $0.02, outside of what he said, most banks are not going to be your friend when it comes to this type of construction, or any for that matter. 

This should be 3-5 quotes for you to get an idea of the true number for fixing it. 

We used a HELOC on our primary to purchase and begin renovations on a duplex nearby, and just this month closed on a fourplex that has a couple units rented, and a couple that need full demo/flip (which is now in progress).I'm taking some big swings and really having a blast doing it.

There is no reason you can't do this in College Station or wherever your home town is, or in Dallas. 

I've stabilized that hemorrhage and have made good progress to reducing this debt but a recent chat with a conventional lender didn't seem to yield any options due to the DTI issue.