Accountant says, "I'm screwed on taxes for the BRRRR I did..."

[Mary White]

In 2017 I purchased a foreclosed 4-plex to do a BRRRR. We cashed out a state retirement account from a previous job, used cash and also partial 1031 money for the all cash purchase. In March of 2018, I got a loan on the property and used most of the cashed out money to pay off credit cards that we used to fund the repairs. My tax accountant just informed me that any cash out refinance money that is used to pay off debt makes all debt on the property not deductible. Meaning that the mortgage interest and taxes are not deductible in any way on a rental if funds from the loan are used to pay off consumer debts. Can anyone help me understand this better? Are we screwed for the life of the funds invested into this property? Can we never 1031 into something else or get a different mortgage to reset this and allow the interest and taxes to be deducted? This is a major blow to our investment strategy. Please help because I'm getting ready to finance another BRRRR (and use some of the money to pay off a credit card used for repairs). I don't want to screw up because I don't fully understand the new tax laws.