@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.

However, after reading about capital gains tax and depreciation recapture, I'm unsure how to account for these future expenses in my plan.  

I think I have a good lender, but I would love to connect for future reference.

Is he going to be a top choice in the future?

For sure, the future savvy agent needs to have high presence on the internet.   

I would love to have it as a platform to teach life skills to our kids and potentially be a business for one of the kids to take on or have them partner on future land use.

@Luis Soto - please give us a little more information about what you're doing, where and any future strategies.

Would love to establish some relationships down that way, such as yourself, for possible future partnerships.

I like to wrap up my threads in case someone is reviewing in the future. 

I'll take this into consideration when looking for other quotes on this property and future properties.