I've been trying to obtain an HELOC on both of my investment properties(one I occupy) but I'm being told Workers Comp isn't considered taxable income, which basically means I was unemployed for 2 years.

Now your margin increases and your float decreases because they will increase your leverage.So now the flipping network is set-up and properties are coming in, getting rehabbed, and sold and now you can look for nice, portfolio worthy assets and now you can afford much higher quality assets. 

This is common misconception that being a landlord create deductions that decrease your overall tax liability.Passive real estate investing allows you to deduction expenses such as taxes, (mortgage) interest, insurance, repair expenses, etc. so that you don't have or have very little net income from the rent. 

I would send them some form of written communication offering them some % decrease in their rent for the few months that the mold problem was ignored. 

The combined effect has decreased CoC on any new buy and hold opportunities.

Your options are to put much more down into the deal, which will increase cash flow but decrease your cash on cash return, find a fixer-upper (which effectively is the same as the higher down payment), or consider other property types or locations.

It has to keep climbing as interest decreases and rent increases.

There was a slight decrease in median sales price from the preceding month and a 5% increase from the preceding year for the entire Austin Metropolitan Statistical Area.The City of Austin saw a change in median home price from $633,000 to $555,000, a month to month decrease of $78,000 and an 3% increase from the previous year.

If you sell a property and your new replacement property doesn’t replace the total value of your sold property, the additional value you receive and don’t use (called boot), is taxable.

We've already been pre-approved.I've considered purchasing the new property as an investment loan instead,  but that will decrease our purchasing power as we will need 20% down vs 5%.