There have been a few things that I feel like they could clean up, but it seems like they work hard at updating it to provide a lot of value. 

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

A potential challenge with a HELOCs is they are based on the current appraised value of your home, not the improved value, so you would need to make sure you have enough accessible equity.

So if you have the property for a total of 10 years, moved in at year 8, little value or tax advantage.

Quote from @Nicholas Dillon: I read somewhere that you can request to have your mortgage insurance dropped once your Loan to Value reaches 80%.

@Zach Denny - I agree - chances are the institutional lender won't be comfortable with an owner-financed 2nd and 100% combined loan to value.

In its current state:Current NOI: $79,058 (based on 80% occupancy).Current Cap Rate (at $1.25M): 6.32%, reflecting the property’s as-is performance.Value at a 7.5% Cap Rate (Market): $1.05M, based on current NOI.Given the renovations, vacancies, and risks tied to stabilizing the property, I’m considering offering $850K to reflect its current state and value-add potential.

The valuation and market value of a multi family property differs from a single family and you want someone that understands the distinctions if you go that route.

I found this quote that you posted:  "Also proud to say our quads and duplexes (which are rarely offered by other builders) have not only exceeded our estimates for rent & rent growth but value growth as well."

It can be a drawn-out process, but it might get you closer to that $500k value.