A well qualified business broker or someone else experienced in those calculations (think someone with statistics/finance expertise) can easily do this.  

If I decide to go with option 1, I will have to borrow the money for the renovations at my primary and it may make it harder to qualify for a loan given the little or no cashflow. 

"They are probably in sketch locations"- If by "Sketch" you mean anywhere in the inner city you would be right, however if being in the inner city alone doesn't qualify as sketchy then there are plenty of Section 8 rentals in low crime and very stable neighborhoods. 

I havnt even spoke to a lender yet on what I qualify for.

If they want to bring on a new roommate, you screen them like anyone else and if they qualify, great- you can talk about amending the lease at that point, but that is only a courtesty. 

Not practicing law in your state though, so you need to consult a qualified lawyer in your jurisdiction to see what to do

@Damon AlbersSince those properties are used for investment they would qualify for a 1031 exchange.

I do qualify for being a broker which comes with some additional education etc. 

It's great if you qualify, it has many benefits.

A tenant doesn't qualify for a S8 voucher by making good financial and life decisions, so what quality of people do you think the system is dealing with?