If this is someone you have worked with before or someone you trust and have confidence in then you should form a legal partnership including a partnership agreement that clearly conveys what each of you is responsible for and how you will each be held accountable and the penalties in the event that one party is not doing whats expected of them.

Do you have a lease agreement that you are able to provide the lender? 

Review their management agreement.

(Going forward I'm considering adding a clause to mgmt agreement to specify before & after pictures + itemized invoices.)

Its cheap to start an LLC. if the property is in your personal name and want it in your llc, you will have to transfer it to the llc (transfer costs). as soon as you have your formation docs, operating agreement and EIN number you can open the bank account.

I advise you to take this time to make sure you get a updated rental agreement/lease between you and him, after you do the repairs; take a long, slow video and lots of photos of his unit (& the whole building- especially rental & public areas) LABEL & SAVE the evidence in a safe place (or two!)

Blue Spot Home Loans - They said they'd consider, “future rental income” if you secure a lease agreement AND security deposit for rental of your existing condo prior to final loan approval for the condo you will be purchasing. 

That and to have a solid partnership agreement ironed out by an attorney.

Due I put it in the rent agreement?

@Michael Mainini nothing wrong with a partnership if you're partnering with someone you have been able to trust for many years but regardless make sure you have a legally sound agreement between all partners that leaves no doubt in case there are disagreements.