How do you finance a property with collateral?

[Oleg I.]

Friends, I have a couple of rental properties, and two of them completely paid off. I am trying to find a way to leverage them to buy my first multi-unit property. It seems that everyone I’ve talked to wants me to refinance them and pull the equity out and use these funds as a down payment. I have some cash to put down as a down payment, but I really want to find a way to leverage paid off properties.

Is this even an option? How does underwriting works in this case? Would I have to look for more private investors vs. conventional organizations for the loan?

Any help is appreciated.