There are too many factors to consider to just provide base rates for what you're asking. 

I don't remember the exact cost when I did it but I remember thinking it was cheaper than expected.I didn't see a comment mentioning that you should just include utilities in the rent and increase it based off that so I'll be that guy.

Across the board, the worse the neighborhood, the better the cash flow, the better the neighborhood, the trade off for tenants base, better schools, low crime, etc etc.

Will they base their calculations solely on the income from the two legal units and disregard the non-conforming basement?

I’m based in Portland, Oregon, where residential investing seems challenging due to landlord-unfriendly policies and negative cash flow on higher-quality properties.

Whether To file a 1065 partnership return or being treat it as a disregarded entity, Is the determination based on the location of the property or the owners' residence state?

I recommend that you find a trusted or recommended Mortgage Loan Originator (MLO), who can give you options for property-based loans (mostly investment loans) and they don't use your taxes but the P&L of the property.

If you are thinking about a new purchase with a heloc vs a current 30 year fixed rate, this could be a good alternative.Basically, helocs are billed based on the average daily balance of the account.

Diversify and leverage the best strategy based on the specific deal.

I never thought about maybe they are assessing it based on wrong fundamentals such as you said.