Extracted appreciation is tax deferred until sold and forgiven at death.

But compared to the $1,000 (or $3,000 with water extraction damage) emergency repair, that's a good deal.

If you allocate those funds into another property does it cover that potential loss you would be taking by extracting the additional money?

Our best has appreciated ~$4K/month over the holding period (21 years).As for difficulty extracting value, I am not going to say it is as easy as cash flow that gets put into the bank by the tenants, but it is not super difficult. 

In Beckley, WV, there are strong extraction, healthcare, government, and service professions, but most people see WV and only think “extraction.”

Would we jeopardize anything getting a mortgage and extracting capital to invest elsewhere?  

Recently i pulled all the multifamily 2-10 sized units, was a pretty simple data extract. 

Note with the current RE rules, I never expect to pay taxes on my appreciation (rules can change) even though I have extracted appreciation multiple times.I am not stating my RE route is passive. 

I intended it to be a BRRRR that was unlikely to extract entire investment.  

It is by taking equity, extracting out via HELOC/REFI/Sale, that you effectively grow your net worth.When you monitor ROE, you can see which properties are doing well and which ones aren't.