I would only refinance if the interest rate is below 6 (I know it is higher than what we have) but my worry is that if we don't act soon we will not have a home for less than $1.5M here soon (which to be honest here is about a 2 bed 2 bath house so pretty small).

New mechanicals (electric, plumbing, HVAC), new kitchen, new bathroom upstairs as well as additional bathroom in basement and 1/2 bath on 1st floor, cosmetics throughout, and a finished basement.

Find something with 3 bedrooms and 2 baths if you can. 

I'm considering Birmingham and Huntsville area for SFR (3 bed/2 bath)/Duplex.

My wife and I currently own two rental properties and our primary residence.House 1: 4 bed 3 bath.

Are there vacant or boarded up homes on the street?

Single bath houses are both harder to rent and sell then 2 bath houses Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

It’s 2 bed / 1 bath that needs significant work.

For example, if you have a contract with the plow guy down the street to shovel your driveway each winter, this is generally personal in nature and will not be binding on the family you sell your home too.

Also, they do not just look at the property down the street from yours, they may be comparing your property with a property across town.