Maybe an example will help
Property A valued at $500,000
Loan A $200,000
set up a LOC for $200,000 loan B
Now go out and buy property B, valued at $500,000
Get loan for 80% $400,000 Loan C
Remaining 20% and costs come from the LOC, Loan B.
each of the loans, A B C are only secured by one property.
Property A secures 2 loans. Property B secures just 1 loan.