Use SFH HELOC to Purchase 12-Unit Apartment?

[Bob Asad]

Would you recommend doing something like this?

Using SFH primary residence with a HELOC (ex. $425k) to purchase a 12-unit Apartment ($1.5M) with 25% down ($375k from the HELOC).

The remaining $50k from the HELOC could go into fixing/rehab of the 12-units.

Then cash-refinance the larger amount from the 12-units to pay off the HELOC in one lump-sum (as much as possible), then using the cash flow from the apartment to pay off the rest of the HELOC.

Repeat the process with a new apartment.

1) Does this make sense? Any flaws in the thinking or process? Would there be issues with the 30-year conventional bank loan itself for the 12-unit apartment since the down payment is from a HELOC?

2) In a cash-refinance, let's say the new appraised value of the apartments is $1.8M, does this mean you can apply the $300k into the HELOC and not pay taxes? (or are there fees? Aside from the cash-refinance cost itself)

3) Does this mean the new mortgage (30-year conventional for the apartments) be based on the $1.8M with new interest rate (at the time), etc.?

4) Is there any good way to "calculate" the new appraised value ahead of time to know what to fix/rehab?