Seeking Clarification On Leveraging Debt

[Account Closed]

Hi All,

I am a new investor trying to figure out how to stretch my money out the furthest and I still can’t quite grasp the concept of leveraging debt. Here is an example that I would like to be corrected on:

1. Let’s say in an example I’ll choose a round number: I  have 500,000 to spend in a cheap market. I take 2% away for closing costs and am left with 490,000. Can I then put 20% down on 24 $100,000 homes, saving the extra 10k for reserves?

2. Can I then use an equity line of credit for 80% of equity, which would be $384000 and save 2% for closing, $7680, which would be 376,320 and put $20,000 down on 18 more houses?

- this would mean I have 98,000 of equity from the original 24 homes, and 360,000 in “equity” on the second set if that counts as equity even though it was financed with debt.

3. Do I “own” the equity I used the equity line for in the second round of houses? Where is the line in the sand for how far you can scale using this? Is it worth the risk of taking on so much debt?

I assume im not correct in my assessment and would like to know where I went wrong.