HELOC or nah?

[Philip Wayne Ostriem]

I bought two properties last year and just finished renovating one of them. I have plans to renovate the second in April. Property 1 I just finished and is worth about 325K while property 2 I'm renovating in April will be worth about 200k when i'm done and it's rented out. I owe around 160K on property 1 and own property 2 outright. 

My Goal for this year is to renovate property 2, have it rented, refinance, and then buy two more properties.

Question:

I'm considering taking a loan out on 2 to pay off property 1 and then pulling a HELOC on property 1 because it will allow for more equity to be tapped into and in my market will allow for me to make "cash" offers on properties. I've only ever done a conventional finance loan with large down so the HELOC is unknown territory for me. Are there any down falls with going with this strategy?