Equity from one investment for down payment on another.

[Brandon G.]

I would like understand this concept correctly.

If I purchase Property A-Duplex for 70K and it is worth 100K and I put 10K down, I will then have 40K in equity in the property upon purchase.  If I would then like to purchase Property B-Duplex and use the 40K equity from Property A, how exactly would the bank view this.  Would they see me as having 2 loans on Property B (the equity loan and the mortgage loan), or would they roll all of this together and make it one loan?

Suppose Instead I used that 40K in Property A equity to put down two 20K down payments on Properties B & C.  How is this viewed?  Is this something banks discourage?  It seems that leveraging (using) the mortgage payments to build quick equity and then using that to fund new investments would be a much faster way to build a portfolio of properties rather than only saving from my W2 job each month.  Any information on this topic is greatly appreciated.

Thanks,