In other words, seems like a unique way to increase the value of the two buildings by consolidating them as one entity.So of course first you'll want to find a real estate attorney with experience specifically in deals where the seller holds the note. 

Increase rents - this is probably the easiest and #1 factor. if you fined an under rented property and have the opportunity to increase rent you are on winner.

We have some unique hybrid plans for unique/smaller portfolios...really the goal is to always make it a win win and essentially make sure by adding management it will increase revenue that exceeds cost or of course free up owners time to be 100% hands off.

Throw the increased mortgage rates on top of that...What would the pros recommend?

ulta high risk.. if you want to do this to increase your deal volume just do it yourself and pay the bird dogs a fee to bring it and manage it if that's what they are doing..

Do I have to wait a year or 2 when rents are increased to make the ARV higher in order to make refinancing worthwhile?

I'm a conservative investor, so these high cap rate cities are not something that I've been looking at due to the increased risk if we have a serious downturn. 2) Wait or buy now?

Tenants with increasing incomes. 

He bought the lot in 2014 for $44k and now wants $120k.House values in the neighborhood have increased 33 - 46% since 2013.

It’s not going to do you much good if you pull a bunch of equity out and increase your payment (likely with a higher interest rate) and the paymentand expenses are higher than what you’d receive for rent.