Buy property with cash and then refi for home equity loan

[Quentin Tai]

I'm still learning my way around the forums. If this topic has already been discussed, I would appreciate a link to it. Thanks in advance!

I'm a new ...pre-investor. No deals, no experience other than buying my own house, just looking around but I wanna get in! (Bear with me... I'm sure you'll see tons of holes as I go through this scenario. By all means, please rip it to shreds.)

So let's say I've found a turnkey buy and hold rental property where I think the numbers work at a certain mortgage rate. 
Let's say all the banks that I talk to aren't willing to go below 7% with me (let's pretend I've gone around and looked really hard).
Then I hear about this thing called a Home Equity Loan that, right now, would be paid back at a lower rate than 7%.
Let's say I can get the cash together to outright buy the house and then take out a home equity loan at a lower rate than the banks are offering me for a mortgage on a rental property.

This sounds like a good way to buy a property and pay a lower rate... but I haven't heard too much about people doing this so it makes me think that there are better ways to use the money that is put into buying that house...

What are some considerations that need to be made?

Are there rules around taking out a home equity loan on a rental property that would prevent this?

What if the way that I get the cash together is pooling money from a group of family/friends and paying them back after I do the refi?

If you're reading this and saying it's a terrible idea or completely unreasonable or unrealistic, please let me know why :) 

If you've done this before, please tell me about your experience!

If you have seen other discussions about this, please share a link I will continue to search through the forums myself and add anything I find here.

Thanks!