Cross Colateralizing equity to purchase multiple properties!

[Ben Baye]

I just purchased my first duplex and during the closing I found out something interesting about the use of equity to purchase multiple properties. I’ve never heard of this and wanted to hear other people’s thoughts. 

My Lender stated that I could use up to 80% of the equity, less mortgage obviously, as a down payment to purchase other properties. This would allow me to not make payments on the full 80% supposing my mortgage is under that percentage. I can list the property as collateral on another property to cover the down payment. This can be done on multiple properties - cross collateralizarion. 

Has anyone done this? 

Is it a good strategy?

Are there things to be aware of?

I would love to hear people’s experience or thoughts on this! I haven’t ran real numbers with it yet but the concept sounds exciting!