Obviously there are a lot of variables but I want to just make sure I have got the gist of it down.

It psychologically tricks you into paying your fixed rate low interest mortgage off faster with a higher variable rate HELOC. 

As long as closing costs are being ignored in every deal you analyze, then it provides a consistent view across opportunities and you don't introduce the variable costs of who you use to close and what points you purchase.

You can pocket millions or you can lose your shirt...in either case based on variables beyond your control. 

I know that there are MANY more variables to consider here, but would I be crazy to consider making an offer contingent on the sale of my other property?

Your example clearly explains how to view a property and some variables that come into play and what to watch for.

Once again, taxes and insurance are going to be highly variable.

@Patrick Philip A lot of variables there, not to mention it varies a lot by area.

It also may be a variable interest rate.  

@Joshua Dees i agree with you, I'd just like to make sure there's a best path to take with all the local variables taken into account.