When we did appraise an apartment, we would interview the manager/owner and get details of operating expenses  (would request a copy of the Schedule E from the past 3 years) and of capital expenditures recently to help determine depreciation of those items(actual age) and determine capital reserves calculation for the pro forma.  

I have grandiose plans as I'm sure we all do, but I would like to find a favorable market where I can continue to do deals over the years and form a network.

Pay it off in cash (another 13K) or put your required down and you can borrow form a new loan.

Come up with a line of questioning that you ask every one of them and you'll start to form a VERY clear picture of what is going on.Any real estate professional that is worth their weight will be willing to take 15-30 minutes to talk with you on the market.

Depending on property location, some Buyers DO offer a premium price; especially if the land there is ripe for value-added development, or is unique/famous/rare.I suspect that any pro forma letter sent to you will NOT be from those Buyers! 

Question number 2: If I cannot do it - is there a way to form a corporation that I I can invest in with my 401 that would in turn give me a second mortgage?

What you used as Year 1 pro forma is your stabilized pro forma.

Quick point - in a C neighborhood, your real cash flow may be significantly less than your pro forma, unless you're more of a proactive landlord.

It very well could be advantageous to do so, only way to know is to build a pro forma and work out the maths. 

Trying to form a plan, so knowing what we can and can't do is important!