Might not be worth it.It doesn't sounds like making the financial investment for upgrades whether you choose to sell or rent also makes sense.I'd cut and bail, take your money and do something a little better with it.

I could sell my house to get the funds but the value on my house continues to grow (located in the up and coming Avondale hotspot) so I would hate to cut off that asset at this time.

As mentioned above, it might be better to wait until all the work is done and title is clear.

2) Avoid Misunderstandings - be up front and clear about every aspect and with every person - Do Make full disclosures, put it in writing, people have bad memories3) Avoid putting your (career) ladder up against the wrong wall and climbing it - Do think about what you want for an outcome and walk the steps backward on paper to outline how to get where and who you want to be

I am trying to cut down on my expenses though by making small changes like eating at home instead of going out, skipping some trips w/ friends, etc.

If it was a flat surface we would simply install quarter round with clear caulking to act as the moisture barrier and keeping the flooring down.

They have more skin in the game then you do.Make sure you get clear title.

I wouldn't eliminate it though, but make it clear that rents are expected to rise each year no matter what, and it might raise more if they only sign 1 year lease.

A partner might want a cut of the deal or they might be ok with you paying them a % of interest on the loan they give you. 

Those costs can cut into your returns.