My question is, if I were to buy a property for 70k with an fha loan ( 2.45k down) spend about 10k in repairs, increase its value to 100,000 would I be able to refinance out of the fha loan to a conventional loan without having to live in it for a year?

For me all this money is being spent on essential repairs; not one penny will increase your rent.

Once the renovations are completed and we get a tenant moved in, and lease signed the revenue will increase by approximately 37%, so I want to go back to the bank and get a new appraisal to determine a new value. 

Unlike single family homes, if you increase the NOI on an apartment building, you have instantly increased the value of the building by a nearly exponential amount (exactly how much depends on the going cap rate for the area).

It's more tedious and time consuming but it substantially increases the odds of the tenant buyer actually closing on the option don't you think?

There are several approaches to doing lease options, and consequently, many variables... so it would be prudent to do so to 'maximize' the exposure, pre- screen the largest number of applicants, increase the likelihood of 'closure' (selling the property) with the tenant buyer(s) and structuring the deal, to optimize your ROI.

As @Jason DiClemente suggested you would need a higher rent rate to accommodate the increased mortgage payment. 

Let's break down what the BRRRR method is.B = BuyR = RenovateR= RentR = RefinanceR= RepeatThis method only works when you are able increase the value.

There are some downsides to a HELOC such as interest rate increases which is likely to happen. 

Very common....either;1) the house was listed below actual market value2) the bank’s bpo is inflated, no consideration for condition, etc.3) combination of the above 2