However, depending on your situation there are other ways to possibly raise your income by using bank statements if you were self-employed etc.  

I believe there could be other benefits and reasons to use a hard money lender such as transactional ease (depending on lender) or perhaps even as a way of opening doors for borrowers who may not qualify for bank financing.

We offer it as an adjunct service and depending on the plan it depends on the cost but it's relatively inexpensive.

It really depends on many factors what option you would use.  

If you do go with the selling route, I'd recommend going "sold as is" or build you asking taking in consideration of the repairs needed. another option depending on financial situation consider financing the repairs?

A typical multifamily consists of 6 beds with an upper and lower unit, and market rent is typically anywhere from 12-1600/month/floor depending on area and condition of property.

In class C neighbours, depending on crime rate and some other factors. 

Given the details you've shared, the situation's legality largely depends on the contract you signed.

With the standard disclaimers about tax advice and how everything depends on your goals: If you have a high income, when you cashout refi you may also able to take the interest payments as a write off, which may make your effective interest rate lower than it would seem. 

10 minutes at a local bar, restaurant, or coffee shop asking questions to locals will be more valuable than 100 hours of internet research.