How I Turned $1,000 into Five Million in Real Estate in My Spare Time

• Over a 20-year period, it is difficult not to get rich from real estate if you follow a simple formula. There are always “good reasons” not to buy, but always more and better reasons to buy.
• The “pyramiding power” of borrowing money to buy rental properties, and without any particular striving soon built up a valuable portfolio.
• “Pyramiding power of borrowed money” as the “secret force of capitalism,” used by every great industrialist.
• Whatever your return year to year, do not diverge from these four principles:

1.  Don’t borrow more than you can safely repay from rental returns.
2. Only buy properties that need renovation while still renting out.
3. Only make improvements that increase the property’s value.
4. Keep selling at a profit and reinvesting your profits.

Eg:

• Save enough money for a 25 percent down payment on a property, borrowing the remaining 75 percent, giving you a total of $10,000. Two years later, sell the improved property for $14,000. Repay the $7,500 loan, and after the cost of selling the property, you now have equity of $5,800.
• This process, if repeated over a period of 20 years, results in the following:

After 4 years $11,575
After 6 years $21,000
After 8 years $39,363
After 10 years $70,548
After 12 years $124,884
After 14 years $219,972
After 16 years $386,376
After 18 years $677,583
After 20 years $1,187,195

- How I Turned $1,000 into Five Million in Real Estate in My Spare Time, William Nickerson
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