It took me about two hours to draft the lease, get it set up on docusign and coordinate between both parties. 

He works with the loan officer who would assign the mortgage to an approved attorney (usually a friend) or he could tell them I am his attorney and it would come to me if I can be approved (write for a national title company, have malpractice etc) I order a title exam from third party title examiner.

The question is how do I structure the deal to make it work out for all parties?

The first advice thatvI can offer you is to conserve your money dont be haste to spend it.

As others have pointed out, you may want to be more conservative on maintenance, Capex, and vacancy in a D area.  

Just make sure that the 1st property still comfortably cash flows, factoring in ALL the expenses conservatively, after the cash out refinance.

Question regarding this potential strategy--- How do I conservatively estimate how much the bank would value this property, after improvements?

The unfortunate part is that many of the legal issues that landlords face are completely on a state by state basis.

Other than that, I've projected a rough profit estimate of $10-25k (being conservative).

I guess the part i am struggling with is valuing the equipment.