Inventory is low and we’re in a local housing shortage so price on old stock and making repairs has risen so much that I’m actually now contemplating new construction as an alternative.

The pricing will be impacted by:- fire protection of the town (hydrants vs none, is there alternative water supply such as a pond, volunteer vs professional, etc.).  

@Elliot LandesThere are plenty of syndicators on this site.However, you will need to learn an alternative skill set, which is to evaluate syndications.

They naturally cater to social distance with limited common spaces, doors that open to the parking lot, and private rooms without hallways or elevators.

This is a great alternative to a self-directed IRA for those who are eligible.

Get a list of lenders together and some alternatives. 

Most likely the state where the property is located is where lawsuits would be brought if they are something for personal injury like a trip and fall or something of that nature because the “cause of action” arose in that state.

Some of the areas most conducive to this type of thing naturally seem to be the areas with exorbitant tax rates (Brentwood, Carnegie, Dormont, etc.) and being as that I would only be collecting rent from one Unit, a $500/month tax bill might make it more beneficial to just try and find a small single family further from the city in a nicer area that can't be converted.

What marginal tax rate you would be in the future year(maybe it would have been better to take it out in a later year) even with the 10% penalty)With that said - I personally took out money from my 401K a couple years ago to invest in real estate and I have no regrets.You should also determine if you have alternatives - Are you able to loan against the 401K?

Alternately, close the HELOC and open a new one after closing on the refi.