Refi on #1, Pay Cash on #2, where's the limitations/catch?

[Joe Edwards-Hoff]

So, I don't know how I have never heard of this method or financing a property, or at least it never stuck. The general concept is getting a refi on a house that you own free and clear to pay for a new property. That way you can pay cash and don't need to obtain traditional financing for that house.

My question, is where are the catches or limitations? I've listen to numerous audiobooks and read a bunch and this is the first time I have really understood this approach. Jeff mentioned it in a reply to one of my posts the other day, but it didn't quite click until last night as I was listening to the Weekend Millionaire audiobook.

I am assuming there is a limit on how many times you can do this, since Jeff said he was capped out on residential loans.

If anyone could give me a bit of insight (or a link to a good article) it would help me come up with some more specific questions.

THANKS :D