With that said I am looking to do minimal work to renovate the home such as painting and adding new appliances.

There are a few properties in the Midwest that manage to generate cash flow, although the appreciation is minimal—this is about the best scenario you can expect.

I want to refi and pull some of that equity out ($200-$250k) so I can keep growing my portfolio but I'm not sure how to approach it as it would obliterate the cash flow I currently have, and in the current market I won't be able to make up for it with additional properties as they would also have minimal cash flow.

I recently opened a HELOC and I recall it's at prime for the first year (7.5% currently), and I only paid minimal closing costs.PML or HML I would expect rates >10%, plus points, possible prepayment penalties etc.

It is not uncommon for syndicators to list properties they were passive LP investors in, and for sure to list properties they were/are also a part of GP, with limited/minimal active management roles.

The loan is 12 months, pulls twice a month, the interest is minimal because I'm paying it off so fast. 

Consult with a tax advisor or attorney familiar with both partnership law and real estate to ensure compliance and minimize tax liability.Once under a TIC structure, 1031 exchanges for individual members could allow them to reinvest proceeds from the sale of properties into new ones without triggering immediate capital gains taxes.

Mostly people with minimal RE experience are adding a single ADU and they often make that choice based on cash flow without taking into account the negative equity position.  

Repairing to sell might recoup some costs, but given the market and your limited funds, selling “as-is” is likely the best option to minimize further losses.

No more messing around.If they get out without issue, fix and clean whatever was done and thank your lucky stars you got out with minimal problems.