My understanding is that, If my equity in the house decreases (by the value of the “pledged” brokerage account decreasing), the lien holder can request additional funds from me to true up my equity to 25%.

Do I have to list it as sold for its original purchase price or a reasonable current value (say $4000) and decrease the overall reported sale of the rest of the property accordingly?

You want to see a pretty consistent increase in population over the past couple decades with a pretty consistent decrease in crime (if you put them on a chart they would be inverse).

It depends on your tax bracket" may not be an appropriate answer here.For the most part draws and distributions are a return of capital/decrease tax basis and are not considered taxable income.

The reason why is because your return on equity (ROE) decreases with each passing month.

It should always be higher than tax value and if it is not, you can generally contest tax value and have your taxes decreased. 

Then your debt decreases AND income increases helping DTI in 2d.OR, can you house hack the next rehab project with a 203k.If you have good credit and the other rentals are cash flowing, you will have options. 

So once I spend the money, its going to be tied up and unavailable for the 12 years it takes to pay off the expense (assuming my 10 days a month rent stays the same and doesn't increase or decrease).Thanks in advance!

THis means as your equity increases due to appreciation, your equity value decreases. 

Is there room to raise rent or decrease some expenses?