Milling?

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I have an investor friend that recently told me about milling. I'm looking for some input and experience with milling. Does it work? Does it not work? What have you seen? What are the legal issues?

This is how I understand milling:

You take a home that has 100k + in equity. You take out a loan for the entire value of the property. You lend out the equity to Hard Money borrowers who are willing to pay 5 to 10 points per month. You use the cash flow to pay the mortgage payments on the home and pocket the rest less taxes.

Am I missing something? Is there another name for this?

Look forward to the discussion