Should I leave a certain door open during the appraisal so that the building is still technically a duplex?  

I wrote a post on how to find comps and calculate ARV that you might find helpful: https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-valueTo answer your major concern, when you get comps that have a large range, there’s usually a reason that you have to dig deeper for. 

I am not sure what the technicality difference in him holding a recorded mortgage leaves us with.

My concern is by using the HELOC as mentioned then applying for add'l conventional loans as we grow our portfolio how will this impact our ability to continue to get funding from the banks?

@Winn Cook, I would be more concerned about the future buyer's inspector.  

After we leave the property, the question arises, whose name should be put on the deed to the house?

I’m looking to put an offer down but there’s one concern, the foundation. 

I have done this, but now prefer to leave the money in the business because I can and because I don't have to pay taxes on the wage I pay myself.  

They leave no meat on the bone.

I would tell them the lease starts August 1st take it or leave it.