I'd recommend pushing density to 3 or 4 they all finance the same. we picked 3 because of the 35' height allowance in our area. here is a rendering to help paint the picture. our target appraisal value is 550k on the first few and pushing them to more than 600k as we sell some or keep them but if you are the only one building multifamily it's important to highlight the importance of appraisal and selling or disposing of some assets to create comparable to be used. our market has very little 2-4 units built because of economies of scale we are the only builder doing this style and we control the full process and it is a high barrier to entry where we are at. we are able to build at a lower cost now than almost buying a duplex because they are so small. each one is 668 sq ft total of 2004 sq ft. 

You said you are ready to move on with another one, so are you keeping the current as a rental property?

Leaning toward keeping everything the same but not married to that idea. 

Whether it's  keeping  their home or selling keeping as much equity as possible.

Keep in the mind the size of the unit--2 ton, 2.5, 3 all cost something different. 

I would also recommend keeping a big, beefy emergency fund.

That's important to keep in mind.

I would be weary of that. the rate and terms seem more favorable for a regular transaction. take the cash now or keep the property. 

Keep in mind to get the best rates (including for refis) you have to live in the property.Living with your parents can be beneficial since you would be living for free, but is that the lifestyle you want?

A landlord can keep those reserves and use it for normal wear and tear or more serious damages.