Dead equity is doing nothing to increase your income.

@Joe Lambert That makes me think that the rents I have been using for the area are too low and I could increase my rent estimates.

My friend converted stuff to gas on the main house to increase Amps in the panel.

Your likely better off finding something that isn't rehabbed that you can update and increase rents yourself. 

Can I raise rents immediately or should I rehab to a certain degree to justify the rent increase.

You need a plan to increase the value.

I strongly recommend you increase them to 10% CapEx and 5% Repairs until to have accurate information.5.  

What kind of business person needs to increase his credit score and embellish external financial strength with help of 3rd party?

Coming in under 1% it doesn't seem like the best option for cash-flow, however, with the future developments in mind, could the house have more potential for overall value increase?

Her edge for me to consider her over others is that she can offer higher and stable rent, but I need to verify if her higher rent is including utilities ASAP; she asked me to increase my asking rent to what she’s allowed from section 8 if I can provide her a cooking stove, and to install central air which I’m considering anyway.And what should I tell my other turned down qualifying applicant without any discriminating element that I might not be aware of if they ask for the specific reason after I’d told them that I’d already chosen a financially better qualifying tenant over them?