Expansion Strategy Help! -Investment Prop or New Residence First?

[Lana Waddell]

Hi Folks! 

Relatively new here and hoping to tap into wisdom of the group. I currently own a rental property (it was my first home purchased back in 2011 so I have a solid chunk of equity here) and my current primary residence which I purchased last year. Both are in CA on 30yr conventional mortgages.  I can pull nearly $200K out with cashout refi on my rental property in order to expand my real estate investments. With some buy down in points, I can get just over 3% rate, pull enough out for down payments on 2 properties, and maintain positive cash flow on that property. I plan to reinvest the cash pulled out into: 

(1) investment property - Leaning toward trying out an STR but might shift gears to another LTR. Looking at SFH in FL in the gulf coast area. Purchase price 300-400K

(2) Upgrading my primary residence in about 6-12 months with the intention of converting my current home to a LTR.  This one my partner would be going in with me on. Purchase price roughly 600-700K 

My concern is financing strategy.... refi lender advised my W2 income will likely only support one more conventional loan. I don't want to purchase another investment property, and then discover that I don't qualify for a loan on a new primary residence due to DTI being too high. Doesn't seem like it makes sense to use hard money/creative financing on my personal residence at that point as there's no return on investment? I'm trying to avoid backing myself into a corner here.

Can anyone help me with thought process here or best approach on order of operations in expanding? 

Thanks in advance!