The slope of the land and how much dirt to be moved also comes into play as it can get expensive to level for site work.Additionally inventory levels of similar locations with vacant buildings where developers or tenants can go in cheaper and faster might be competition unless you have one of the best locations in the area.Basically what I am saying is that there is a lot to this and you need a specialist to help if you are trying to extract any additional value out of the property versus it's current use.

Former is enticing because it will enable me to pay off one property and rental income will pay for the HELOC but then I still have HELOC on top of payment on a new home.   

I would argue that your duty as a human being at this time is to the children there and not the mother, and if you allow the situation to go on you're enabling an obviously unfit mother.

I've seen way to many multi family properties just get into that death spiral of a slum lord and horrible tenants and it's just one band aid after another until finally the owner extracts whatever they can and exits.I personally would want to be buying something at a little lower price, perhaps redeveloping, etc.Build value rather than extract value.If the assumptions above mentioned check out and you're happy with those returns I don't see a major hurdle ----  big however though is that you're only outperforming your cost of capital by maybe a percentage point?

I have two options in front of me either to obtain a rehab loan, which will cost me $10k for six months ( points, fees, interest) or just finance the entire deal with my own money (cash).The rehab loan will enable me to obtain an additional property, so in six months i'll have two properties ( one with the loan, another with my cash)  but it'll cost me an extra $10k (on top of the regular down-payment which in any case i'll have to lay out) .

@Beth CannonHere in NJ for extended cold weather the system stops providing heat as there are no heat elements in the atmosphere to extract from.

Practically you can search Zilllow's map with the school and crime layers enabled.

The most traditional avenue that most banks/credit unions will enable are the typical refinance (cash out refinance) to access equity. 

I'd prefer 10 year loan but I'd be willing to do 30 year if it enabled us to have another rental. 

@Ray Johnson great question -- we research and select the best available third-party real estate technology  providers and enter into exclusive relationships to create tech-enabled funds which give us a unique competitive edge designed to enhance returns to investors.