I'm biased towards Milwaukee and Madison because I live here but these cities have great rental markets as well, if you're willing to consider Wisconsin I'd recommend you look at Waukesha, WI - in between Milwaukee and Madison, low crime, and great occupancy rates.First, I'd visit some of these markets to see where you'd like to live.

If your rate is low on the 5 unit, I might consider the possibility of a line of credit for my equity instead of an entire new mortgage.  

This is when you buy a primary residence (1 to 4 units, the more the better) which you can usually get for a very low down payment and get the best interest rates on and then rent out other units and/or bedrooms within your unit to pay for the mortgage and other expenses.

Did you know that you can acquire your a primary residence from up to 1-4 units for as low as 5% with conventional.

The appraised value seems low and I am trying to understand the best strategy to challenge this value and the cost / benefit of going through the condemnation process. 

Ordinarily non recourse financing is reserved for larger stabilized assets that are low levered.

Plain and simple the reason we were able to acquire the properties we have over the years is because we leverage low money down loans.  

Expect very low LTVs (we're talking like 40-60% down minimum), much higher rates, and very long close times for out of country financing. 

What have you seen that has helped your property immensely to stand out from the crowd, outside of your typical “updated” or beach front view with pool cases?

I grew up a Carpenter, so being able to rent a unit and fix the other seems like a low risk option for getting started.