The biggest mistake I see here is that most people dont tell the sellers the real truth about what they intend to do with their house, which is why you keep having to "make up stories" which should never be the case!

Take the extra cash and see if you can build a MF.  

Turns out the seller's brother was not telling the full truth.  

Eventually they will come back up, and some of the folks that refinanced to an ARM may not be able to cover the difference, so some of the extra cash that's in the market may dry up as well.

I know you are probably not talking about Detroit and I know it is not fair, but I'm telling you the honest truth from my perspective.

I recently did a cash out refi on an investment property to pay off the line of credit I had used for the downpayment on said property.I have about $5k in funds left over, and I'm trying to figure out what to do with ...

Even if the buyer was happy to pay the extra cost generated by the HOA fees, explain to the appraiser how HOA reserves adds value to the home.

I've actually done the same thing with washers/dryers that I provided as a convenience to the tenant because I had extra ones.

For serenity, stroke the check and chalk up the little bit extra to shared appreciation.  

Time will tell if they are worth the extra expense.