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?

The downside here is that this will require two loans, which will decrease my ability to purchase additional homes down the road with traditional financing.

And with a new roof and ac that decreases Capex for a while too!

These same thermostats also have an auto temperature decrease function which brings the heat down to 68 degrees if the thermostat is not touched for 3 hours.