networth of $1M by buying 1 100k house a year for 10 years?
The book i am reading said that if you take into account a 5% appreciation rate of property, you can potentially become a millionaire by buying 1 100k house a year with 10k down payment for 10 years.
my math is awful, and i have tried to cut this every way possible - is this true, or not? If so, how?
This is from the book "The Millionaire Real Estate Investor"
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#3 Real Estate Deal Analysis & Advice Contributor
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- Mercer Island, WA
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
Nope, I can't get there either.
The math is straightforward. Lets just look at the first house you buy.
After 10 years at 5% appreciation, its now worth $162,889. The loan balance is paid down to $77,231. That gives you equity of $85,658, of which $10,000 is your original investment and $12,768 is the paydown on the loan.
Figure that out for all 10 houses, and add up the equity. I get $483,614.
To address the other comment, the houses are actually worth $1.32 million, with the appreciation. But you still owe $837,000 on them. Doesn't make you a millionaire in my book.