for the interest to be fully deductible, the most you could cash out is the mortgage balance on your residence and the cost to purchase investment property. any excess would be treated as a home equity debt and due to tax law changes effective in 2018, interest is not deductible. points paid need to be allocated between the two properties and need to be amortized over the life of the mortgage/refi. other costs of refinancing also need to be allocated. those allocated to the residence do not add to basis (see IRS pub 523) and therefore are lost.
regarding the portion of a refi allocated to your home, it becomes a personal decision as to whether the money saved is worth the up front costs.
