Equity. Why the hype?

[Alexander Timberlake]

Hello,

I have potentially an ignorant question: What is all the hype about finding properties with equity in it? 

I have learned that a lot of REIs only market toward properties that have 50-70%+ equity.

I understand that if you own a home that has a lot of equity in it, you can borrow against that equity using a HELOC or Home Equity loan.

Here is the point I am hung up on... if you purchase a house that has 75% equity in it with conventional financing... doesn't this "reset" the equity in the house? The seller's mortgage will get paid for and your new mortgage will start. So if you made a 20% down-payment, then there is only 20% equity in the home.... 

The only situation I see equity as important is if you are a fix/flipper who is using private or hard money to purchase the property in cash. Then you can purchase the property without a mortgage and borrow all the old equity in the home with a HELOC or Home Equity Loan. This can fund the rehab costs of the fix/flipper

Am I missing something?