His real income is from the newly rehabbed gem that sells for a much higher price, earning him some meaningful income.Your agent sounds like he's doing his job. 

In class C and a low appreciating (but high cash flow market), will that property appraise for a meaningful amount above ARV?

The big box banks are stuck in rigid loan overlays that make it impossible to extract equity unless you fit their model.

It may have value, but if there is no demand, then you can't extract that value.

If market rent did not increase with the increase in the property's appreciation then a refinance may reduce your cash flow and, by association, your cash on cash return.In this scenario, it may be prudent to sell the property to extract the tied up 173K in equity and accept that you've made 273% profit on your original 46K down payment.  

A place I would like to learn from, share, network and hopefully contribute to in a meaningful way.

So far you've risked nothing but you have an opportunity you can leverage into meaningful experience that will help you next time if this one doesn't add up.I've seen situations like this where the house represented such bad blood, the seller wanted to lose money to punish his ex.Good luck!

My wife and I bought a house for $190k, and by luck a couple years later it was worth $325k, so I extracted some equity through a HELOC and purchased a triplex.  

Find a reputable real estate agent and set up an automatic notification system to email you properties that meet your set criteria right off MLS...this is totally free.The only thing I can extract from your post is that perhaps you need to have a pre-qual letter prior to making an offer?

Joe Gore LOL, and there you go again, speaking without any meaningful contribution and only eluding to substance, pay no attention to that man behind the curtain...