Generally, a replacement property's excess basis (if any) is treated as newly acquired property and depreciated using the MACRS recovery period, depreciation method and convention allowed for that asset.  

This property will not produce positive cash flow long term and having excessive dead equity only makes it worse.

I have been running an industrial dehumidifier and carpet blowers in the room for 6 days and it is dry but it smells musty. 

Had there been rules excluding rentals or excessive fees, I likely would have fought it, but it wasn't a large amount.  

Flipping follows demand, and it will dry up, even for the pros.I’ve been around long enough to watch the flipping cycle come and go.

What happens when liquidity dries up?

There are no other tri-plexes in the area that have sold within the last year to compare to.The increase feels excessive, but I have no experience in protesting assessments.

I’d stick with that until that well runs dry!

I would then have the HELOC money plus excess equity (leftover from refi) available to use again to purchase another property, correct?

Trust me when I tell you that your $1 million can dry up faster than you think if you're not wise with how you use it.