I’ll admit, they can be difficult to find since everyone is overvaluing properties in this market. 

I suppose they are "retail prices" creating a 7-8% CAP rate overall.

So it is very difficult to purchase off the online auction.

Our goal is to add 2/3 more properties in the same area but its been difficult to find good properties.

Figure 10% higher tax (cap gains vs ordinary) and SE tax isn't too bad If someone is over the Social Security limit however still sucks paying it. 

If you're going to ask your mother to sell her cap gain tax exempt primary residence on payments, at least let her make some interest. 

The “non homestead” assessment increase cap is 10% Per Year.

Regarding your question, intuitively you'd think a bank would only care about NOI/cap rate/equity at purchase vs when you refinance, but I may be wrong, hopefully others who have been through the refinance process can share their wisdom.

It appears the Cap rate is too low and the lagoon situation is very undesirable. 

@Luis Marcelino Since you are an architect, it may be difficult to "dumb down" to a general residential renovation project, but you have an inherently strong skill set for this type of work.