<prompt> Human: Doesnt it allow you to buy several rental properties while really only having to come up with a down payment a single time?For example you save up 50K, and put it down on a rental property. Then a year later, you cash most of that 50K out by refinancing, and then use the cash to put down on another property. You didnt even have to really save for that second property. But of course, youll be saving anyway, so you can add savings from normal cash flow to the cash out amount for even more buying power. Then you keep repeating this process, each time increasing your cash flow. Wont this easily make you rich, or am I missing something?  <response>: Not sure I fully understand the question.If the question is: can you become wealthy by investing in real estate? Then yes -- it is possible to become wealthy that way, and many developers do rely on leverage debt as part of their investing strategy.If the question is: is this type of refinancing safe and an easy way to get rich? To that, I would say no. Theres no guarantee that youll get a competitive interest rate, theres no guarantee that a lender will even agree to give you more than your home is worth in a refinance this is especially true if your credit is poor, you dont have enough incomeassets to support the mortgage payments, or if the market in general is skittish. With only a year of payments under your belt, your original mortgage is likely still enormous, which makes it even less likely that this will work.As you pile the mortgages on, your debt to income ratio will continue to grow even more lopsided, which will make it more and more difficult to qualify for a new mortgage for a second, third, fourth, etc. property even with a downpayment, no lender wants to be 6 in line on someone who is so over-leveraged that they wont survive even a small market correction. TL;DR - on paper the basic idea of becoming wealthy by investing in real estate with debt works, but cash-out refinancing isnt magic and you could go broke pretty easily if youre leveraged to the hilt. 