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?

I am interested in flips and rentals only because I am not familiar with other strategies at this time,  as I continue to learn and gain confidence in what I am doing other strategies will be considered.

This gives me great confidence going forward.

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. 

I know that real estate can leave a bad taste in your mouth if it bites you the wrong way but here's to hoping that you find the education you need to move forward confidently! 

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.