Good question and there have been some good BP posts on diversification.  

First it's diversification, plain and simple.

HUGE gains with no real work on the property.. they use it to hunt and fish and ride quads etc.. so personal enjoyment while those trees just keep growing.seems like a nice diversification to ones long term retirement strategy..  

DIversification is critical.

@Jeremy Sharp I think it's about customization for your focus and then maybe diversification by building out assumptions...there are constants as well...we're up to 93 data points on every MF property we look at...so your analysis can get crazy if you want it to...and truth be told, I don't even think we are scratching the surface of possibilities...one of the most important things to remember is underwriting deals is all made up...it's different for everyone...

Im a big believer in diversification as way to mitigate risk. 

Point being, between your conservative current returns and the fees and interest charges of a refi or HELOC, I think you'd be better served to 1031 into something else (or a few somethings, diversification never hurt!). 

I don't know if  you have already chose a market or plan to stay in your own backyard but I look for 7 factors (population growth, job growth, diversification, landlord friendly, business friendly, familiarity and rising market cycle).

I avoid a self directed IRA simply for diversification purposes.

With it being blue collar and only 2,000 people scares me because it goes against my factors for choosing a market which are job growth, population growth, job diversification, business friendly, landlord friendly, familiarity, rising market.