Questions on Rental Strategy

[Harken Maguire]

Hello everyone,

I recently reconnected with a friend from college who presented me with an investing strategy that really fits me. Basically, he buys a house, remodels it, refinances, then rents it out and repeats. It seems to me like this allows you to invest without the large down payment.

I am curious of your thoughts on the continual leverage of this strategy with the refinancing. 

I am also curious on strategy for managing the business side of this. Once refinanced is there anything keeping me from flipping the property to an LLC?

Would I be able to buy the second home for 5% down if I would now be using that as my primary residence?

all info and advice is welcome.