Understanding Home Equity

[Cris Agui]

Hey gang, I’m a newbie trying to figure out the example on equity

I purchase a home for 340,000 here in NY bout 2yrs ago fixed it and just for sake of argument let’s say is now worth 380,000 I’m guessing I have about 40,000 equity plus the down payment example # $10,000, now that would total 50,000 in equity right?

I’m looking to buy another home

say for 300,000 with 5% down so my mortgage would be say 2600/mth with ins and taxes,

example numbers but similar for NY, Now not only do I have to worry about renting the house for over 2600 to cover mortgage, tax, insurance but I'm guessing I would also have to consider the say 50,000 I took out in equity, the 3-6% closing cost and any other $$ for a rainy day? is that how it would work? seems like not only would I have to worry about covering the investment loan but I could potentially lose my 1st and 2nd home if I’m unable to pay loans does that seem right?

Is that the reason why everybody seems to invest out of the expensive states like NY and California?

Thank you.