The fact that your board of realtors recommends it, or that is how it is traditionally done there, does not make it the best way to approach it. 

Does anyone know if a mixed use 7 unit building would be appraised with the income approach or by sales comparison.

There are two methods of appraisals, Sales approach vs cost approach.

As the winter is fast approaching here in Minnesota (MN), I'm curious to hear what your "must do" winter prep lists contains to make sure your rentals are good shape for the cold? 

For a HELOC approach that would be good as you will have a hard time finding any bank to give you more than 80% on a HELOC.On the other hand for your own residence, you can get away with much less downpayment, especially if this is your first home purchase.

I appreciate any suggestions or feedback on the approach I took. 

Once you've decided your policy and given it to the tenants, if they disagree with your approach the other thing is to give the 'happy clause'. 

This first year I have a rental loss approaching the $25k passive activity limit for active participants.

@Lynnette E.I dont know if providing them with a dump fridge when the tennat already contacted a lawyer would be the best approach.

How would I approach this?