Even then it is harder as many focus on buy and hold investors for cash flow as they buy higher priced properties and you do not have to work really hard to find a below market deal where a rehab and flip will work.For instance if an agent finds a deal with 20k built in equity that can work nicely with some cash flow for a buy and hold investor plus the agent might pick up property management fees and income if they want it.

I have a friend going this route right now and once the house is complete, he'll move in and have $30k+ in equity off the bat. 

I have two properties now, each with about 200k in equity.

My wife and I own 4.5M worth of RE and have about 1.75M in equity.

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.