"Secured loan" aka borrowing against my own money? Any use in RE?

[Account Closed]

I recently deposited a large title company check at my friendly local credit union, proceeds from a recent sale. My model is BRRRR, so I will be hunting for another distressed asset to rehab, and that money will be the seed.

I had to sit down with a manager to do a couple minor tasks, and I mentioned that I also have a few other properties I own free and clear and intend on refi-ing or getting a line of credit on eventually, and he started suggesting this weird loan product that goes for 3% but is secured against the money I deposited. 

I admit I couldn't wrap my head around why this would be useful in any possible situation. I wouldn't be able to spend the money I am borrowing against since its the collateral, so to me it just seems like borrowing my own money and paying 3% for the privilege. 

However the manager kept saying it was a better idea than refinancing or LOC'ing the free and clear rentals I have now... I suspect he was trying to push a useless product on me, but maybe I am missing something??

Any idea if this is at all useful?  Am I missing something?