Waukegan is 5 minutes from a huge Naval base so there's usually no shortage of military families to rent to.

@Karolina Powell, if you are going to make investment decisions based on someone saying a small market property is worth a 6-8 cap rate, do I have some things you will want to see...Everyone should have a general rule of thumb, and Austin may be correct, or he may be way off.Mixed use can be hard to value in any area unless there are other trades.  

Local lenders may be a good option too

Aside from the cash-refinance cost itself)3) Does this mean the new mortgage (30-year conventional for the apartments) be based on the $1.8M with new interest rate (at the time), etc.?

Texas (SA) based company so always make sure to include them in my search if they come up but ultimately have never pulled the trigger. 

Can anyone advise based on their experience which will be cheaper in the long run?

Calling - and then there's this option.

According to their research online, Charlotte ends up appearing fundamentally as an affordable option with great fundamentals.

Other option is as it is a duplex-rent out the side you planned to live in which has probably had updates more recently, live in the side he's in and slowly fix it up.

I'm a real estate agent and can check what options you have.