It's great that you've got your analysis on lock, I always recommend seeing properties of various conditions and neighborhoods so you can help establish where your sweet spot or greatest value lies. 

I accepted their counter offer with the condition that they bring $5,000 to closing.

The property was in rough condition, and needed a decent amount of work and the sellers basically took the first offer I through their way.

Smaller lots, land, tough condition houses, junked single wides... etc...almost never. 

Spend more time with neighbors to better understand local conditions and differences between similar looking properties.

Just make sure you have enough equity to pull this off.Talk to lenders about their HELOC terms and conditions.

Would it be best to leave the equity in the rental at this point considering the market conditions or shoot for a cash-out refi?

Find out what their terms and conditions are and work backward from there.

Our deals are conservatively underwritten and the operators that I work with turn away a lot of good deals to find the best markets, deals in those markets, include a margin for unforseen market conditions. 

From there, potential additional revenue opportunities can be identified.Unit Conditions and RenovationsUnless the property in consideration is a brand-new complex with new systems and appliances, it is critical to an investor’s forecast to understand each unit’s makeup, i.e. flooring, types of appliances, countertops, etc., and condition.