My chainlink fence was good and to pull out my fence and put up board-on-board wood fencing was going to be around $4,000-$5,000.

And if you need that rental income to qualify you may not have much of a choice. 

Since you're guessing four years here, I'd say stay one more year and qualify for the whole thing if getting some tax-free cash is your goal.

Once that's finished I'd like to finish the other side in the same way.Is there a good resource describing what will be necessary to make the attic space legally qualify as bedrooms in Grand Rapids?

Awesome looking property and you should know that you did something that 95% of the people on this board will never do.....and that's take action.

I contacted him, and laid the offer out, and he was on board. 

I would ask the lender, but probably not most lenders want you to have skin in the game, even the seller takes on a lot of risk if you don't pay, because they would not be first loan position. 

To qualify for the mortgage, they only count 1/2 of the current fully rented proceeds for rent in your qualifying calculation since when you buy, you will be living in half. 

What steps do I have to take in order to qualify as a section 8 landlord, if any?

In Plymouth County if you earn less the $139.5K, you can qualify for a MassHousing mortgage.