Does it make sense to increase my home debt to invest in other property???

Knowing that, if I did buy the property, I may slightly increase rents at renewal time.

I am in the same situation where I live and I just searched apartment floor plans on the net and found what I thought would go well here and be popular convenient layouts for tenants.

IHDA (Illinois Program) has a few options, but most popular DPA program provides a grant up to 5% of the purchase price ($7,500 cap). 

. $100k under the county appraisal is not to low - just work with your numbers. you can put it on paper with 30 working days Due Diligence clause and option to increase it by another 21 days. 

For example, things like vacancy, no payment, rent increases, late fees are all going to affect the actual number.

Your overall cash flow will increase as well as your ROI and you will still have $1.6mm in equity.

Investors also assume that property prices rise and debt is paid down - another way of increasing overall equity over time which is not just a measure of prices. 

The absence of a utility bill increasingly overcomes the aesthetic arguments of roof vents and satellite dishes being impacted by a solar array.

https://www.har.com/content/newsroom/Highlights: Single-family home sales rose 5.3 percent year-over-year, with 5,260 units sold;Days on Market (DOM) for single-family homes decreased slightly from 67 days in February 2017 to 65 days this February;Total property sales increased 3.1 percent with 6,375 units sold;Total dollar volume climbed 4.5 percent to $1.7 billion;The single-family home median price rose 1.4 percent to $226,200, which represents a February high;The single-family home average price edged up 0.4 percent to a February high of $281,945;Single-family homes months of inventory shrank year-over-year from a 3.4-months supply to 3.2 months;Townhome/condominium sales fell 5.1 percent, with the average price up 2.0 percent to $210,887 and the median price up 4.6 percent to $170,000;Leases of single-family homes fell 11.5 percent with the average rent up 4.1 percent to $1,720;Volume of townhome/condominium leases dropped 11.5 percent with average rent up 2.2 percent to $1,515.