Using Investment HELOC as Down Payment to Buy Investment Prop

[Sherman Lau]

I'm relatively new to the BP community and this is my first post.

I have a multi family investment property that has built up a lot of equity (over $500k) and I would like to use that equity to help me acquire another investment property.  The following is the strategy I think may work.  I would love to get comments on whether this is possible or get suggestions on how I may do this.  

#1 - Acquire a HELOC on the investment property (old forums stated PenFed has a product) at 70% LTV (Don't want to cash out refi, since I have a really good 1st mortgage already in place) #2 - Take out the funds out of the HELOC and put into savings for 3 months #3 - use the funds along with some of my other savings to acquire another multi with 70% financing. The target property will have a purchase price in the $1.5M to $2M range.

Any thoughts on this strategy and any leads on the lending institutions would be greatly appreciated.