HELOC for funds to purchase investment property?

[David Sisson]

I'm trying to figure out if this is a good idea, or pitfalls to avoid.

I'm interested in purchasing a local multifamily (3 family) in my area - buy and hold - with the goal being cash flow to help fund my daughter's college education. I think this may take 2 or 3 homes total, but I'm starting with one. I prefer to purchase properties that are ready to go, but willing to do some renovation. Not interested in a gut renovation (for example). 

I don't have the $ for a 20-25% down payment, but have plenty of home equity I could tap. I could do a cash out refi, a home equity loan or a home equity line of credit. 

I've heard that a HELOC might be a good option - essentially get the HELOC, use it to fund the investment property, wait for seasoning and refi the home, repaying the HELOC in the process. Repeat with the next home.

I'm confused about the refinancing of the home - doesn't this imply that the investment property has to rise at least 20-25% in order to cash out and refi? If I'm buying a 'ready to go' property, isn't it harder to get it's value up this much in a year or two? Wouldn't this work better with distressed properties? 

I can run the numbers the various scenarios, I just don't understand the refi portion of the deal.