The financial performance of these investments often are disappointing because of excess repair costs and liquidity issues (ability to sell for the amount you paid for it). 

The half dozen big time individual investors that I know in Los Angeles, also, own large management companies that can profit off of excess capacity by managing other owners(especially institutional owners) assets.I would not be surprised if most management companies also owned or were actively trying to acquire assets, too.But, if you are an insurance company or pension trust administrator, you would probably not want to be managing the day to day operations of multi-family even if it makes a great addition to the trust portfolio.It depends of the specific scenario of the owner/s

OOS is a very viable approach for someone in your position with some excess capital that you want to put to work for you.

Seems a bit excessive, was this agreed to beforehand or just now?

This might be SOME rewiring, plus a new panel, meter base, riser, and weatherhead (say somewhere between $4,000-$8,000) or it could require a total rewire (in excess of $8,000).  

Then the question is, how much excess capacity exists in the system and is it located where demand will be. 

One big sticking point is "qualified immunity" which shields some gov workers from literally bullying the rest of us with illogical restrictions, excessive regulation, blundering incompetence, etc.

Typically cash out from a refinance is not taxable but does it become taxable if excess is given to LPs beyond their initial investment? 

Gov. can only squeeze taxpayers so much before taxes become so excessive as to be ineffective. 

One is get some rain barrels on their property which will store some water and then the excess is what comes through your yard.