@Anonymous - so are you saying the strategy works or doesn't work? Wouldn't the resulting $1 million loan have to be collateralized by all three properties for the strategy to work. (the bank shouldn't have a problem taking more collateral against their loan),
I just don't see that example or discussion in the IRS publication that supports @hindsight2019 situation.
https://www.irs.gov/pub/irs-pdf/p936.pdfrts
How could you deduct the interest on Schedule E if the loan is only collateralized by your primary residence?
