Without know more specifics, I'd suggest selling what you have now and investing in properties closer to where you live (and pursue 1031 exchanges).

I have a followup question - I will realize a lot of capital gain from this home in Idaho, so I think unless I purchase a new primary residence I will have to pay that capital gains tax. 

To get around this some folks will purchase the vehicle in an LLC and then sell the LLC, and this is not breaking the agreement.The same thing would apply here.

If you are coming in with 235k, you probably would not need much more, if any, to make the purchase.

Both properties have a substantial amount of equity that’s essentially sitting idle.Would it be a good idea to tap into this equity (through a HELOC, cash-out refinance, etc.) to fund future fix-and-flip projects or purchase additional rental properties?

If you are going to be doing the rehab work in exchange for equity then that value needs to be determined up front with a specific timeline that you have to adhere to in order to earn your equity.

Seems like too much work for too little return UNLESS you own the property, or perhaps have an option to purchase the property allowing you to capture any increase in value.   

Any amount you purchase less than you sell, or any amount of cash you take out is considered to be profit. 

Are there any specific clauses I should include in a room-by-room lease for a shared living space?

For an auction.com purchase in Washington you have 2 options.