This morning we went and walked a current flip that belongs of one of my coworker's investors.

Is this a good deal or should I walk away after numbers from the contractor?

Additionally, holdover tenant is now subletting out the rooms making income and advertising it on 168.com.

I personally am okay with having a cosigner for a tenant because this adds an additional person who is financially responsible for the lease if the tenant is unable to pay rent or for damages they cause. 

heloc terms are not the same as fannie mortgage terms (like @Chris Mason mentioned)for instance I have a 90% heloc on an old primary that was ZERO cost, and the rate is prime -.001%. this additional LTV might help your cause. a heloc is also not necessarily due once you move.

In addition, in our lease agreements we require tenants toobtain renters insurance for theirs and our protection. 

In your case, if the seller is not willing to sell it to you at the appraised value, then you should first express to the agent that you are willing to walk away on from the deal if there is a deadlock on the fair market value price.

Common additional apps are things like Receipt Bank or Hubdoc for receipts.

for such a small addition, skip the architect and just get a general contractor

These forms provide a written confirmation of the terms of the oral rental agreement and help prevent misunderstandings or disputes down the line.By having tenants sign estoppel forms, you can verify important details such as rental amounts, deposit amounts, and any additional agreements or responsibilities.