I've been thinking for a while in working for myself and increasing wealth instead of just money.

These properties are located in Milwaukee, Wisconsin in a C neighborhood and finding a renter in the late-fall, early-winter months could be difficult.

I'm having a very difficult time getting some of the equity out to fund the purchase of a multi-family.

I imagine that the length increases by some amount, but I doubt it would be a full year since many tenants feel fine riding out a month-to-month lease until they decide to leave.Do the downsides (forfeit of owner ability to increase rents after the year and potential to get stuck with a trouble tenant constantly calling for minor repairs) compensate for whatever this additional length of stay is?

Besides debt service will your expenses increase against the new gross income?

Where to invest is a more difficult choice and a lot depends on your goals, your investing style and your strengths.  

Areas prone to drought and wildfire probably have increased dwelling premiums also.That being said, if this is normal in those areas, the rent should probably cover those expenses without too much trouble.  

Less headache and liability.HOA fees tend to keep increasing over the years so need to consider that.

I seems like it will be difficult logistically, but is it legal?

We are in the Denver market which is very difficult to break into.