<<you're limited to deducting the interest on "only" the first $1M of the outstanding balance>>
@Carl - I'd argue that he can't deduct the interest related to the entire $1mm loan against the primary residence, as "cash out" interest can only be deducted if the principle was reinvested to improve that primary residence. And the idea would use the 'cash out' to pay off another loan unrelated to the primary residence and not to improve that primary residence. If the loan was collateralized against all three properties, I think it could work (but creates problems if you later want to sell one of the properties and not all three at once - you may have to refi again)
@hindsight2019 further, I'd suggest obtaining documentation of any "traceability provision" from an IRS source before executing on the strategy; the publication link I provided doesn't take about that,
