The refinance does not trigger an increase in assessed value.#5 Property is cash flowing much higher than my estimates, and in a B+/A- neighborhood (see below)So for the numbers, I am still refining our pricing strategy, but so far I am seeing ~$4,000 in gross revenue per month on the entire property. 

So the too big house method puts you in a good location, increases your choices of where to buy, and potentially has higher rental income and appreciation.

Just after, the book talks about improving the property so rent brings in more money per month/year, which increases Gross Rent Multiple. 

I hadn't thought of doing double stacked wall cabinets, but I wonder if for the increased cost of those extra cabinets and installation I couldn't just go with another slightly more expensive line that actually has the 36" tall cabinets as well as the extra deep cabinets for above the fridge and microwave.

If you gactor in that rents should have increased over 5 years you can use that to offset even more without cutting into cash flow.That being said, I have started to make extra monthly payments towards principal on the notes that will come up in the next 3 years for refi, which will bring the baloon amount down significantly.

Our home value has increased by about 50% per Zillow and Redfin estimates.  

I have been in similar situations and have rarely had anyone move out because of the increase. 

Try your very best to cut unnecessary costs and increase your income.

Your profile doesn't say where you are located, so it would be very hard for anyone to make a useful suggestion of books or resources.As a new member, there are several things you can do to increase the likelihood of getting helpful responses here on the forum.

It works best if the market is expected to increase over time, even if just at inflation rates.