Using equity from my rental property to buy more

[Ryan Bonheyo]

Here’s a question for you, BP! I’ve bought my first rental property recently for $51,500. The appraiser appraised the property at $105k. The property is already occupied and cash flow after all expenses will be approx $300/mo. With my lender, I’m allowed to make a loan up to 75% of appraised value ($78,750). So, I’m going to use the extra money from my loan to cover closing and repair costs (if necessary). Then, I’ll use the remaining money as down payment for my next rental property. I would like to know if anyone else did the same thing? If so, I would like to know what’s the pros & cons?