Should I take out a HELOC or HEL on my primary residence, and use the funds from that to make a down payment on additional properties and then obtain a conventional mortgage on them?

Just completed a large remodel on my primary residence ($90k in) with the goal of refinancing to consolidate some personal debt and pull some additional cash for other real estate related projects, BUT ran into a road block with a lender.

(once I move out of the property and optimize the rental income from the additional unit)

The term "material amendment" as used herein shall be defined to mean additions or amendments to provisions of these Bylaws which-establish, provide for govern, or regulate any of the following:  (a) voting; (b) assessments, assessment liens, or subordination of such liens; (c) reserves for maintenance, repair and replacement of Common Elements; (d) insurance or fidelity bonds; (e) rights to use of the Common Elements; (f) responsibility for maintenance repair of the several portions of the Property; (g) expansion or contraction of the Property, or the addition, annexation or withdrawal of property to or from the Property; (h) boundaries of any Unit; (i) the interests in the Common Elements:

As long as the rent still covers the payments you should be able to leverage the money to either buy an additional rental unit (using that units future rent to help qualify) OR use it as a down payment for either an equity partner or hard money lender for a fix and flip in your area. 

One additional factor that helped me in the early stages of REI was having the advice of a trusted real estate agent.

They then hit you with an additional $1.25% if you work there too. 

I didn't think much of this until the inspector told me that he had seen people turn attics similar to this into additional brs + bath.

In addition, how would refinancing a few years down the road change the equation/outcome?

In addition, put in your contract that $5k-$10k will be kept in escrow until they move out, with the stipulation that if you are forced to evict them, the escrow can be used for eviction costs.