I currently have some really good equity built up in my current house. And I'd like to get into the real estate/rental market. I live in a college town, so the rental market is strong here.
I'm simply confused on the borrowing on equity path. I bought my current house by saving up a big down payment. However I was talking to basically a rental mogul in town, and he was telling me how you can borrow based on the equity built up in one house, against another house, and therefore don't actually need a down payment (I'd prefer to invest the cash instead, obviously). Essentially investing with other people's money.
So can someone explain that process to me? Do you really not need a down payment? If so, I assume you pay the total buying price on your loan, and then the first house is collateral if you stop paying? This seems like a very anti-mustachian path though (buying essentially what you can't afford), or is this what everyone here is doing?