Investor physician with strong income and low personal debt looking for solutions to refinance some of portfolio and pull out some equity for further investing with history of Foreclosure on personal property in 2012. 

You can built that back up...or the "worst case" is you take out a <insert form of debt here> if you have an unexpected cap-ex expense come along. 

We want to keep everything legal and above board, so we're steering clear of any properties that aren't zoned or grandfathered for the intended use.

Also, will turning the home into a full rental property influence my goal to get a second mortgage, or will they only factor in my debt to income?

Yes, there are legal ways to do this.

With that being said it looks like I have a terrible income to debt ratio. also a credit score of about 620. 

You will learn about legal processes / land descriptions.

My wife is the lending candidate as she is a W2 high earner with a 798 cr. score with only mortgage debt on our primary residence.

I do have a legal background.

They are doing the same relatively minimal amount of work regardless of how much capital the LLC holds.A good self-directed plan facilitator or attorney will have one or more preferred custodians they work with, as well as tighter integration between the legal and custodial processes.