A long time ago I learned about using home equity to buy another property. One thing that didn't make sense then ( I was a teenager at best) was using one houses equity to buy another house...but that's not the end of it. Technically you own the second house free and clear because there was so much equity, so now you get another loan on that house and buy the third with that $$$.  Now you own the 3rd home free and clear and have a loan on only the first and second home. So, guess what? Now you use the equity in the 3rd home to buy a 4th....so on and so forth.  Of course, you have a lot of payments to make on all of these loans.  But, my question is whether or not this is still a practice that takes place, is it legal, is it frowned upon? Is it a good idea as long as you are buying homes with proven renters in them? Or if you're buying homes and making quick money from them in some form or another?