@Matthew DrouinThat is a great position to be in.Now with regards to the refinancing options and how much you should take out, I'd say it depends on what your plans are.If you are planning on holding onto to that rental for the foreseeable future, you should stress test that property to figure out how much minimum income it needs to generate each month to meet your mortgage payments.That monthly would dictate how much you can conservatively take out after refinancing (and providing that you lender is OK with that too) without exposing yourself.Now if you have other deals that you want to pursue and you need as much cash as you can lay your hands on, you should take out as much as your lender would allow you to.Personally, I'd go for the option 1, especially if you have the  ambition is build a sound rental portfolio.

As well as signed up for some real estate courses to get my real estate license to lay down the foundation for real estate investing.

How much tile?

As well as signed up for some real estate courses to get my real estate license to lay down the foundation for real estate investing.

Some of the major rehab involves Siding, portion of roof, new sidewalk, splitting electric (new panel boxes and meters), heating (new furnaces and re laying of duct work), water (new water heaters), portion of broken sewer pipe replacement, replace electric wiring to 2 units, new kitchen, bath, flooring, windows, doors (interior and exterior) in all units. 

@Joseph Gozlan Thank you for laying it out clearly for me, that's a very interesting way to look at it. 

Is it carpeted now or does it have tile/laminate/hardwood?

The home has neutral ceramic tile flooring throughout and has nice vaulted ceilings in the kitchen and living room.

Wallpaper, Pepto Bismol bath tile totally gets me excited.  

(Not including material, No moving of pipes, just replace tub, toilet, vanity, tile shower wall and floor)