I don't know how much appraisals go for but I'm sure its a tiny fraction of the money he will make in equity alone. 

I do not understand the mechanisms of going to another bank (I know, only a select few banks will do this anyway under a year) asking them to appraise the house at $175,000 ARV, for example, and getting a cash out refinance, which I assume is the $28,000 in equity I originally put in.

I’m a little lost on this as you could bring her in equity wise like the parents or on similar terms. 

You're already somewhere between 66-72% LTV, depending on whether you have 100K or 130k in equity.

If they routinely trade at $45K per unit then you’re probably buying a ton of built-in equity.

Still, if your values are as you expect you some built in equity,  I would say if you can afford to bankroll a hiccup or a belch as it were, then this is a long term play that could pan out. 

This number will give you indication of you will have lots of gain in equity to distribute or if you will have little equity to distribute.

I am with Jay, sounds like you found a seller finance deal with $50k in equity because it needs $50k in repairs. 

If I got your numbers right, you would have ($235,000 - $135,000 - $12,000) or $88,000 in equity and it looks like it would cash flow pretty well too.

If you are a new investor, probably you will not have a lot of assets and/or equity to worry about (but even that is relative and subjective to each person tolerance to risk) so I would not worry about that till you pass that risk threshold (in my opinion 100K+ in equity, maybe 50K if you are really risk adverse).