Just my opinion.....
If this was a rental property you were selling I would say go for it. Cash in the equity and move it in to something with better cash flow. I am actually doing this with two of my rentals that I own here in CA right now. However, since you say this is your primary residence I caution you on this strategy. If you sell your house you will need to replace it. Your selling at a peak in the market but then you will have to buy at the peek of the market as well. This will drive your own house payment higher and off set some of that cash flow you get OOS. If the market levels off or even declines here in CA over the next 5 years, as many think it will, you will have negative equity in your own home and that is never a good thing.
If you want a decent Multi-Family in the mid west you only need 20-40k for a good down payment. I would recommend saving up this money and make a purchase. You may even get a HELOC for this amount to put down and then you would not be over leveraged.
