I believe getting a HELOC will impact your credit score, so keep that in mind if you're thinking of getting a loan in the future. 

Could anything be passed down to family members without tax impact?

Yes, it's more tenants to deal with, but if a tenant vacates when you have 3 properties, it doesn't impact your finances as drastically.Anyway, hope this helps!

We didn't make a huge amount personally but, learned an enormous amount and it was the action that got us started. 

You may have the exact same house 4 blocks away from one you are analyzing, and they have no impact at all on eachother. 

This environment gives a ray of hope and encouragement to the enormous amount of dry powder sitting around waiting to be deployed.

Note: I understand there are various factors that could impact one's decision (growth goals, condition of property, cash flow, etc.).

Again, as Wayne says, that last part may impact what you offer if you know there are junior lienholders and that someone else is gonna want a piece of the proceeds.One final thing when making an offer...Lenders don't accept or reject a purchase offer.

Does the fact that it was recently a rental impact the capital gains exemption for homeowners of up to $250k ($500k if married)?

We’ve seen enormous appreciation in properties along the Milwaukee corridor - think downtown up to Hermosa.