Prices have increased (higher terms/rates) as the fed rate has gone up so you have seen people who could get 8 or 9% now in double digits.

The only other option that comes to mind is to make the improvements and try to achieve favorable rental rates to push the story that 2 BR homes rent for a premium because its unique.

There are many STRs that do quite well in the suburbs of major cityies Off the top of my head, I can think of one of the STRs we manage that is 40 mins outside of Dallas and it has a great occupancy rate.

I'm still trying to get in contact with the park that is near to get their monthly lot rate. 

Typically, the adjustments I see on appraisals for basements are more flat rate adjustments. 10k is usually the number I've seen.What stinks is that there are a couple of model types that have below grade space where the builder, I'm sure, was trying to lower the taxes by having it below grade so the county wouldn't count that space in the assessment.

Of course "hoping" rates will come down is not a sound strategy so finding a way to assume a loan that already took advantage of low rates is a great option.If you were starting over and targeted a large SFH, would you try to maintain the property in a way that would still attract regular homebuyers (not investors) if you needed to sell?

And while crime isn't out of control in either suburb, it is higher than the national average and the schools are medicore at best.

Gifting equity in a house may be more trouble than it is worth if you are not near the life-time exclusion1) Potentially having to get the property appraised everytime an equity is gifted2) Having a title company update the title every time3) Exemption of the gift tax return is normally for cash gifts below the annual gift tax exclusion, you may still need to file if you gift non-cash4) If there is partial ownership over several years, having to properly pro-rate certain items such as real estate taxes, mortgage interest and rental income if the property is a rentalBest of luck 

If you house hack a single family residence by renting out  a room or two then you would have no property tax but if you buy a duplex you might have to pro-rate the property tax.  

The rates are great, but you definitely have to work with someone that knows what they are doing...