Does maxing out cash-out refi hurt DTI for future rental?

[Michelle Phoenix]

Hi,

I'm new to this group and am also new to real estate investing. I own a home (primary residence) in Southern California with a lot of equity, and am thinking of doing a cash-out refinance to invest in my first rental property. I'd greatly appreciate any tips/feedback on a few questions: 

1. Would you recommend maxing out my cash-out refi to get the most money out or will that affect my DTI when trying to purchase the rental property? Maxing out (i.e. the most I'll qualify for and would want to pay for, which won't come close to all of my equity since there's a lot), would allow me enough for a down payment and possibly even to fully buy some cheaper out of state properties.

1a. If not maxing out, is there a percentage we should consider when doing a cashout? 

I also figured since I have so much equity, I should cash out as much as possible, because even if I'm unable to obtain a rental property, I could invest the equity into a mutual fund like Vanguard and average a return of 7-8% when my new mortgage interest rate would be 2.75%. With an average of 2% inflation, wouldn't my interest technically be 0.75%? Either way, it seems cashing out to invest in a mutual fund is more beneficial than letting my equity waste away if I don't cash out. Thoughts? 

2. I also want to take the right steps to start investing I'm real estate, such as knowing where and what to buy for a first time rental. How to look for cheap/good deals. I think research and proper planning such as looking at price to rent ratios, potential cash flow, how to look for and compare comps, etc. 

Is there a beginner's guide that goes through each step of the BRRRR process in detail (like step by step instructions)?

Thank you!!