Posted by Doug Middleton on May 18, 2000 at 21:14:18:
I also purchased the CS video series a few years back-very inspiring. I think what he’s saying is that you can get an equity loan on your current residence (provided you have the appropriate amt. of equity req.'d to borrow against), and with an equity loan, you can do anything with the money that you want…use it for the down pymt/closing costs toward a rental property. The rental property will then pay back the equity loan over time, but not with your own money out of pocket, with the rental income. Keep in mind, it will take a long time before you actually see positive cash flow, but in the mean time, you are building equity with someone else’s money.
P.S., I am not an expert by any stretch of the imagination (I only own 2 properties), this is just my interpretation of the video lessons. It makes sense though. Another thing, since I am in Texas, your state laws may or may not be different regarding the use of money from the loans.