using 80% LTV without including closing costs you can purchase a $500k property.  

The major factors like the roof, furnace, plumbing, electrical upgrades, and foundation repairs are all examples of costly expenses you'll want to inspect before closing the deal.

Plus the cost of most things goes up over time.

The savings in cost and time could easily pay the financed payments for the machines and provide good return.  

My thoughts from the little I know about the raw numbers however:1) You have no reason to not raise the rent at least a small amount to compensate for the extra cost of ownership the past few years.

Just to give you an example of the type of thing you'd be potentially looking out for, if the community has a pool terrace planned and it's orientation in the new building would face directly towards your property, that could be a source of significant noise and disturbance for you/your tenants, and could make it much harder to sell your property once the new building is built and occupied.On the positive side, new apartment buildings cost millions of dollars to develop and build, and developers really only sink that much money into areas where they're forecasting rent growth and property appreciation for their investment.  

It sounds like you'll have well over $100K into it, between down payment and closing costs - is that accurate?

The rentals are paying the holding costs on it so far (taxes and insurance are high in this market).

many Pittsburgh properties are old and have a ton of deferred maintenance.  5% likely won't cut it.are you looking to house hack something? 

Cap rates, location, and understanding the cost per door alongside your mechanicals and capex is going to be key when buying multi-family.