Another great option is the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat), where you buy a fixer-upper, renovate it, rent it out, and refinance to pull your cash back for the next deal, and this is a good route because most private lenders can go higher LTV than on a rental loan! 

Some of them even walk off the job, even after they pull permits and are technically responsible for the work.  

Otherwise, you can also invest in a scraping software that will pull the info you need auto-magically!

All are perfectly functional now, but could pull higher rent with replacing the flooring, and updating the kitchen.My current financing setup for this deal would be $235,000 from the HELOC I already have secured.

Is it hard to pull that type of cash out of a property?

It sounds like you are just having trouble pulling the trigger. 

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

I've heard of people doing this, but you need to be rehabbing it enough to make it higher value so ideally you need to be purchasing something that needs some rehab so that you can increase the equity because otherwise you're not gonna have enough equity to pull out

Since there is a co-owner, you would have to purchase the property and it is really hard (if not impossible) to pull a HELOC as the basis for the purchase (since it is not your primary residence). 

.), maybe showing how much equity could be pulled out of which property when, whether the portfolio would still cash flow, etc.