In addition to ensuring there are no legal issues clouding your ownership, that will also give you six additional months to clean up your credit score and also to establish some work history.

I suppose you have been reporting the rental income and expenses(including depreciation) on your tax return.If you get paid in Italian currency - it is your job to convert the amounts in USD when reporting it on your return.If you hold the property in an entity(partnership or corporation) you may have additional informational forms to file with the IRS.If you have a bank account in Italy with a value over $10,000 - you also have an additional informational forms to file with the IRS.You should have been entitled to a step-up in basis upon inheritance.

HELOCs are supposed to close within four to eight weeks but can take longer if underwriting requires additional information or documentation. 

You have equity in your primary residence, so refinancing could be an option to obtain the additional funds needed.

You can then bill additional fees/utilities, etc as needed.

. $1200 is expensive when you consider the alternative that I am suggesting is infinitely expandable at no additional costs for the rest of your life.

If you are considering a larger multi-family, there would be additional things to check like employee records, reserve funds, review of bank accounts, environmental assessment, and more.

If its a normal expense that you would or could have in any year, then we cant add it back as income and those will affect your DTI. 

Probably 50% or higher long term.Rent $850 - expenses $425 - lot rent $296 = cash flow $129/month.If you assume a long term hold depreciating by 50% as well then you will need to deduct probably an additional $4500 from your income.   

In addition, they provide a 90% mortgage on the spot if you bring tax returns.