Collateralizing Real Estate in Lieu of Down Payment?

[Rodney Turner]

Hello All,

I own five investment properties, all long-term rentals, and they all have mortgages on them, most of them with balances of less than 40% LTV. I recently spoke to a financial advisor who also is a real estate investor and he told me that I can "collateralize" one of my rental properties to avoid paying a down payment on future properties that I may purchase, provided the collateralized property has no mortgage.

I've been in real estate for over 20 years and have never heard of this and my research is coming up with nothing. Anyone have a simple explanation for what this refers to?

[Rodney Turner]

@Craig Yarnell Thanks for the response. Can a single property be used to cross collateralize more than one purchase, or is it one-to-one?