You'd be refinancing a sub par property in the hopes of improving your portfolio. 

If there is an opportunity to improve the property, you might be able to spend a modest amount and get that to 40% equity.

If you later decide to self insure the Improvements (parts of the building you own based on the bylaws) you can at least keep the Liability going that way.

Both of these loan programs can get you into a home with as little as 3% down, which would give you some additional capital/reserves for improvements after purchase, or a larger contingency/emergency fund, or a good place to start on your next home. 

When you spent 15 hours a day working on your business improving it slowly but steadily and see it come to life.

My rentals are all in a small town and the bank is close for everyone, I understand that this may not be a suitable solution for landlords with multiple properties in different locations.Did you just choose a bank that was most accessible for your tenants? 

Currently the rear of the garden unit is divided up by walls to create a furnace room somewhat in the middle of it, and a second closet-type room to access the furnace room.

They also have access to CoStar (also owned by LoopNet), which is only accessible to agents and is expensive to sign up for.Lauren Prichard, CEOAborn Homes/Aborn Powers

I would work now on improving your credit so that you can be ready to refinance before the extension expires.

What are my risks of buying a property which was sold at a foreclosure auction to one party (who may have made immediate improvements) and then the property was taken by a party which had purchased/exercised  redemption rights.