However, i don't want to completely extract the full amount of money out of my first home and tie up all my money just yet.

However, i don't want to completely extract the full amount of money out of my first home and tie up all my money just yet.

Not quite- you will need to use your adjusted basis of the property itself (you need to extract out your land...but you still need to know the value of the land to report it, or else this will disadvantage you once you sell the property), which is the cost you bought it for, plus certain closing costs, plus any improvements performed before putting the property in service.  

Folks like @Thomas S. are correctly pointing out that the "opportunity cost" of having so much of your capital tied up in your down payment is only effectively earning you about 4% yield (if your mortgage is 4% APR)....and why not extract it and put it to work in a property yielding 15% or 18% annually.

You will want to sell this property within 5 years of your vacating to extract the equity tax exempt. 

. - YES compare it to other properties with below-grade living space, and properties without, to extract value for the below grade living space from market data.

USA         LA Total, all occupations 100.00%        100.00% Management  5.1 5.4 Business and financial operations 5.2 5.8 Computer and mathematical  3 2.5 Architecture and engineering 1.8 1.5 Life, physical, and social science 0.8 0.8 Community and social service 1.4 1.6 Legal 0.8 0.9 Education, training, and library 6.2 6 Arts, design, entertainment, sports, and media                   1.4 3.8 Healthcare practitioners and technical 5.9 5.1 Healthcare support 2.9 2.3 Protective service 2.4 2.7 Food preparation and serving related 9.2 9.4 Building and grounds cleaning and maintenance 3.2 2.4 Personal care and service 3.2 3.2 Sales and related 10.4 10.1 Office and administrative support 15.7 17 Farming, fishing, and forestry 0.3 0.1 Construction and extraction 4 2.5 Installation, maintenance, and repair 3.9 3 Production 6.5 6.3 Transportation and material moving 6.9 7.4 https://www.bls.gov/regions/west/news-release/occu...

Work the numbers as if you were going to make an offer.Ask yourself and others what is good about the property, what is bad about it.Many times you can extract one small (or Big) piece of advice that just resonates with you that will pave the way.Do that 100 times and your fears will subside.One day you'll walk into a property and just know, This Is The One!

Last but not least, rather than sell the properties to extract the equity, have you considered trying to place a second loan on the properties?

I'd look to extract cash and put it back to work in something else yielding more...