Has anybody ever heard of this lending strategy

[Rob Smith]

 I don't know all the details but here's the just of what a friend of mine is telling me. I give his company a few thousand dollars a month after 4 to 6 months,  he then takes  that money  and uses it to  get a line of credit they also pay 7% on my money I am paying them and then something also about a couple years down the road  they complete some sort of deal that frees up another 20% so in essence I'm getting 10% return on my money a year and I'm getting a huge line of credit that I can use to buy good  performing  real estate. Has anybody ever heard of something like this, he also said it is a 50 year loan that can be paid off much sooner he was describing paying more every month, the extra payment after three years we can either have that money back or we can use it to pay the loan down and he was explaining the resin they do this is to keep money in the account like this because they want to make sure the loan payment can get made in order to make this a  very good performing note that they can sell if they want to. this is the just of what I understood it was about a 30 minute phone conversation lots of information was told to me  this is what I retained I want to see what you guys think and if it's worth getting together with him and hearing more about it 

[Jerry W.]

I do not have enough information to know for sure, but everything about this deal screams scam to me.  There are a lot of bona fide ways to get a line of credit, but this one seems very risky to me.