Taking money out of primary resident possible?

[Kevin Paynter]

Hello, 

My wife and I recently purchased our townhouse as our primary residence while she is going to school. With the BP website and podcast, we are now considering house hacking a small multi next year and renting out the townhouse.

We put 20% down for the townhouse and have begun renovating it and making it more modern. When next year comes around and we want to get into a duplex/quad, I was thinking we would almost be brrrr'ing our townhouse, but I don't fully see how to take money out of our townhouse. Is it possible, after reno and appraisal, to take out the equity in the house and leave only 3.5% in the townhouse? Would that mean that a pmi is mandatory?

Any tips and guidance are appreciated.