2nd home refi strategy

[Fred Stevenson]

I have a second home that is paid off. I will probably sell it in a couple of months for 95000.00 to a family member off market, but it just appraised for 115,000.00. My question is would it be a good play to refinance 80% of appraised value, and use this cash combined with another 20,000.00 to purchase a rental home for 115,00.00. After the refinance is secured then I would sell my second home to family friend for 95000, and use that cash for down payments on other rentals. I'm thinking about this strategy because I would assume I could get a better rate using my second home as collateral, instead of, the prospective investment home. Anybody have any thoughts on this strategy and possible downsides that I'm overlooking?