From a rate perspective, likely is not close to making sense at the moment, would need rates to drop further, however if value has increased and you are looking for cash-out, that motivation (any lower rate as icing on the cake / secondary concern) it could make sense to look into

For the project I plan on creating a system to address every aspect, step-by-step, of increasing the value of multifamily properties by making improvements that increase each property's net income.

They also asked for $1,000 in earnest money with the offer. 

In my experience with a specific client of mine, it can often be challenging to make the case for passive income (therefore SE tax avoidance) if you are also a real estate investor doing your own flips.

Are you losing money now but want to improve cash flow and keep?

Re-invest all your cash flow to make your assets better or buy more assets.

My question is this.....when does one actually receive the boot money minus the taxes owed for cap gain?  

@Melissa FinneyEven if someone give you a referral, what meets their expectations, may not meet yours.In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.It's often a case of not doing enough research, as they don't know what they don't know!

I'm thinking it might make sense to start a separate LLC for the 3rd property but the thought of the work and costs associated with it alone makes me reconsider.  

I can assure you the city demolished a building because of make safe violations that were ignored, not because of a desire to force gentrification.