Without any variables, here's essentially what you're looking at... (1) getting the existing 1st mortgage holder to increase its mortgage to provide you the cash out or (2) finding a lender who's willing to hold a 2nd mortgage on property A or (3) finding a lender who will provide you with $X and secure it with a mortgage on both properties A and B.Completely different option that doesn't involve property A would be to try getting seller financing on property B. 

Or is essentially an interest-free loan?

@Tyrone Green - I used Rockwell, and the test questions for the actual exam were essentially the exact same as the ones on the online coursework.

So we essentially trained up new DC inspectors...

The nice thing about notes is that you can scale much easier than owning the property since there are essentially less "moving parts".  

If I can qualify for a 100,000 and the house is listed for 90000 can I make a deal with the seller to pay him the full 100,000 I can get but he returns $10,000 cash that will be used for drywall paint carpets and other non essential upgrades?

I have no debt and stellar credit, but I'm not sure where to start.The whole point here is no-money (or low-money) out of pocket and the ability to move quickly on either good deals or auctions because you're essentially a cash buyer.

So, essentially, you need a property to attribute these expenses to, and without one you don't have anything to deduct against.As others have suggested, you could always consult your tax professional for more specific advise based on your individual situation.

What they oils get out of it is listing your property.

Essentially, you'd be paying cash for an investment property with the HELOC (assuming you have enough of a line of credit) and could then use Delayed Financing to repay the HELOC and have it available for the next opportunity.