Refinancing For A Down Payment

[Charles Kagahastian]

hello all, this is my first post and i'll try to make it matter. as any first-time poster this is going to be a question. the very popular method of using equity in one property as a down payment on another property. However just to make things a little clearer, doesn't that take a lot away from the cash flow of the second property? It's basically financing the entire purchase price of the second property is it not? and does that not mean the cash taken out from a refi has to be taken into account just as much as the loan of the second property when calculating cash flows? obviously i know that it's all about the numbers and if 100% financing would allow for a positive adequate cash flow then the deal may work, but given the fact that refi does not mean free money how is it that investors can so easily use the money from a refi to buy more properties?

Thank you so much for your time and happy investing to all of you!