The answer is to value this as any other business generating income, not just stick within the confined box of valuing the real estate only.  

That's what these hands off processes are all about, not generating a sound investment opportunity for you.

We basically want property to generate some cash flow and long term appreciation.

We've run about a 20% vacancy rate. 2 of our MTRs have been great, the third we sold after it wasn't generating enough inquiries over two years of effort.

What you would want to evaluate is the income generated from the income-producing property(s) to see if the income from your rentals would cover the cost of your new HELOC payment.

The goal is legitimate: due to complex tax rules, you have opportunities to game the system by selling some of your investments and intentionally generating either gains or losses.

If you've been active in this business and actively pursuing a profit during the year, the loss the business generates could help offset other income on your tax return. 

It's been generating an average monthly profit of $1,000.

However, vacancy means covering 100% of the expenses.Multifamily properties almost always generate higher cash flow due to multiple income streams, which also reduces the risk of vacancies.

This is relevant for multiple reasons 1) appreciation is where the real wealth is generated in RE 2) real estate has tax advantages over cash flow 3) in CA property tax increase is capped.