What type of down payment will you be putting up?

@Michael J.I agree with @Steve Vaughan take the money you can make doing the day JOBThis could be 4 down-payments on cash-flow positive rentals.  

Any additional debt will increase the amount in payments to service that debt.Are you asking about a 3% rebate at closing for landscape allowances or closing costs?  

What is the fate of the sister whose been living there paying the payments and keeping everything up to date?

-the property is in a non warrantable condo complex-loan size of $70K-$75K-property is rented and has good cash flow-I would prefer a fully amortizing loan (no balloon payment); so preferably a 30 yr with 30 yr amortization but would consider a shorter, fully amortizing loan as well-Looking for a LTV of 75-80%The deal size is too small for a lot of lenders (including B2R).

You can also ask your renter to set up their rent payment as a recurring bill with their bank.

To answer your question, yes you can take cash out of your primary home to use as a down payment on a second house.  

I closed on that last week and I want to put most of that money into a down payment on another house. 

Below are some quick tips about cash out refi vs HELOC/LOCCash out Pros-tax free money-low interest rate-fixed monthly payments unless you choose a variable productCash out Cons-closing costs (couple thousand)HELOC/LOC Pros-tax free -its a line of credit, hence you can use pay back then use again-usually NO closing costs on residential Helocs; there will be closing costs on commericial LOCs-commericial LOC is very fast moving as far as getting funding and refinancing  (Makes it easy to rinse and repeat)HELOC/LOC Cons-higher interest rate-variable rates-monthly payments depend on amount borrowedHope this helps,CB

You can get in with a low down payment and good terms by living in the property.