How to Create a Million Dollars of Wealth in 13.3 Years

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Long term real estate investing has this misconstrued reputation as the Crock-pot of real estate investing strategies: Low and slow, set it and forget it and at some point you end up with something good enough. You don’t have to be a master chef to work it either. You purchase some properties, you let them “simmer” over time and before you know it, they’re paid off.

I have a major problem with that analogy. I happen to believe that when executed properly, a solid long term real estate investing strategy can be more like a Joel Robuchon seven course meal.

It All Starts with Your Expectations

Henry Ford said: “whether you think you can or think you can’t – you’re right.”

When you start out aiming low and think all you’ll be able to do is purchase “a couple of rentals” and pay them off over time, that’s all you’ll be able to do. So today, I want to show you what a carefully planned and precisely executed long term investment strategy is able to accomplish in a relatively short period of time. My hope is that as you see what’s possible, you’ll avoid stunting your expectations and set them free to accomplish much more important goals.

A Million Dollars in 13 years and 4 months

Let’s take a look at a case study. Mr and Mrs. Smith are a couple in their mid 40s earning a combined annual income of just under $200k with available liquid capital of about $400k in addition to other investments (stock, life insurance, emergency funds etc.). They want to invest this hard earned capital in quality real estate using a long term strategy. Here’s what they would be able to accomplish given current market conditions in Houston, Texas (our home base):

  • Purchase 9 investment properties @ $150k  per property = $1.35M of Asset Value
  • Put down 25% of the purchase price plus an additional 2% for loan costs = $364.5k Capital Invested
  • Take out conventional loans for 75% of the asset value purchased = $985.6k Total Debt
  • Finance the debt for 15 years at 4% interest fixed over the loan term
  • Amount of Principal paid down after first year: $48,699 (this goes up every year)
  • Additional positive cashflow generated annually: $8,100
  • When this cashflow is used to accelerate the debt payoff, the entire portfolio is free and clear in 13.3 years
  • At zero appreciation that’s $1.35M in free and clear real estate, after a capital investment of $364,500!
  • At 3% annual appreciation (the current rate of inflation) that’s $2M in free and clear real estate
  • Bonus: Each free and clear property also yields $11-12k/year in positive cashflow for a projected income of 100k/year

Related: How to Make a Million Dollars from Real Estate: A Step By Step Path

You’re No Smiths

The biggest pushback I get when I present this to prospective investors is that for one reason or another,  the hypothetical investor in this case study isn’t like them. Perhaps you don’t have sufficient capital to purchase nine properties. Or maybe you don’t have 13 years and three months to get there – you need to retire much sooner.

Look, it’s not important that your scenario match the hypothetical. What’s important is is to come to the realization that the “typical” Smiths (yes, even the ones with the resources) aren’t coming close to matching the results I outlined above. That’s because the ones that dabble in real estate investing set their sights too low and end up with the underwhelming “couple of rentals”. And some don’t even dabble because most investment options available are performing in the double digits this year (and it’s not hard to think that you too can pick stocks like a pro). That’s until you experience the cannibalization of your hard earned money for the umpteenth time and keep wondering how you could let it happen again.

Your resources may be just a fraction of the ones I described in the case study. Perhaps they won’t allow you to amass a million dollars of wealth in thirteen years. Here are some more important questions to ponder:

  • Are the resources you do have,  deployed to deliver maximum results?
  • If you keep doing what you’ve been doing, where will your investments be in 13 years?
  • Is it possible that there are other resources you possess that could get you to a million in the future (i.e time)?
  • How did your investments perform in the last 13 years?
  • Why would the performance over the next 13 years be any different?

Those of you reading this that have had outstanding results: Congratulations! By any means, keep doing what’s been working for you. But if not, I want to leave you with this. At some point thirteen years ago you made a decision, consciously or non, to follow a certain path with your money. If that path hasn’t led you to a place worth going, don’t you wish someone had been there to guide you in a different direction.

Well, this is that moment for the next thirteen years.

Photo: Kristina Alexanderson

About Author

Erion Shehaj

Erion Shehaj helps successful professionals achieve financial independence using the Blueprint Real Estate Investing™ strategy. By combining the principles of robust financial planning with quality real estate investments, Erion shows ordinary people how to replace their salary with passive income and retire early to live life on their terms. Over his real estate career of 13+ years, Erion has helped his investor clients purchase $90M+ in real estate assets to build robust real estate portfolios and streams of passive income. In addition, Erion has been involved in successfully rolling out small multifamily new construction projects across Texas. Erion has written extensively about long term real estate investing and business in several publications like BiggerPockets (since 2013), Investing Architect, American Genius, Geek Estate and more.


  1. Interesting post, and a good illustration of what leverage can accomplish. However, as you stated, almost no one, including me, has $400k of liquid assets to invest. Also, the current rate of inflation is 2%, not 3. I think you’d also have trouble finding a bank to make 9 15-year investment loans at 4%.

    I wonder how this strategy would compare to investing the $400k into a small multifamily with a price about $2m? What if you got the property for $1.5m and put the other $500k into improving the property to raise the rents?

    • Erion Shehaj

      Thanks for the comment, Adrian. I’d like to address your points in order.

      Actually, there’s a lot more people with that kind of capital than one might think. And in most cases, they’re frustrated because they don’t know what to do with it that would even come close to the performance I described. Last but not least, the example I showed has been oversimplified to show things in a more linear fashion. But there are plenty of investors who even if they don’t have all the capital available now, they do have a portion of it and the ability to save the rest over a period of time. I know because I work with such clients on a daily basis.

      I know what the government says is the current inflation rate. But as anyone who does grocery shopping on a regular basis would tell you, that doesn’t match the reality on the ground. I guess it goes back to how you calculate it. Enron is proof that you can make numbers say anything.

      You would have trouble with most run of the mill banks. But with the right investment property lender, it’s actually quite easy for a well qualified investor. I don’t mean it in the theoretical sense either. I’ve seen several clients reach this level of properties in the past year alone.

      The multifamily option is certainly an option. I suppose it might work better in some areas than others. In our location, $1.5M gets you a cashflowing property in a C location. The paper returns might be there. But you’d be dealing with a very different tenant profile.

  2. Jeff Brown

    You hit a lotta nails on the head with this one, Erion. For the record, there are tons of the ‘Smiths’ out there, and they’re becoming more and more frustrated with the results they’ve been getting from their current ‘expert’ advisors. The plan to ‘get rich slowly’ almost always achieves traction. The random approach has indeed proven less than successful. Hear about it almost daily, first hand.

  3. I think this is a good article to show prospective investors. As an investor with 3 properties right now and looking to acquire more this is the path I am trying to go down. It will likely take me more than 13 years, but I am okay with that.

    • Erion Shehaj

      Hey Steven

      That’s exactly why I said the following:

      Is it possible that there are other resources you possess that could get you to a million in the future (i.e time)?

      If time is your friend, you can do magical things with long term investing.

  4. Sharon Vornholt

    Nice post Erion.

    As Jeff said, there are a lot of “Smith’s” out there. But you don’t have to be a Smith to benefit from these principles. I always tell folks that paying down rental properties (faster) is just one reasons everyone should be wholesaling along with their other investing strategies. There are many ways to “skin a cat” as the old saying goes.


  5. You can be a millionaire in 18 years starting with 10k and investing about 830 bucks a month and getting a 15% return on your money. This is just a simple calculation and using leverage you could get a better return and achieve millionaire status even quicker.

    • Jim, I would love to see the illustrated version of your comment. More of us are likely to have 10K and so this is something tangible in our eyes. Although Erion you make a very good case in not stunting your goals… Something I think alot of us do. Myself included.
      Thanks for the great post

      • Erion Shehaj

        Thanks Elizabeth.

        I happen to believe that if the goal is to “create your capital” through real estate, the avenues tend to be pretty risky. It’s often a better idea to concentrate your efforts on accelerating the savings process so when enough capital is accumulated to make your first acquisition, you can do so without excessive risk.

    • Erion Shehaj


      The calculation is simple. The application is entirely another matter.

      Here’s the main issue with that math: It assumes you have no steps backwards in 18 years. The problem is, all investing alternatives that allow you to invest your money 830 bucks at a time and have even the promise of 15% annual returns, usually cannibalize your capital by 40% or so every decade. In which case, you’d be right where you started.

      But like Elizabeth, I’d love to hear ideas about where you would put that money to earn 15% annually over two decades.

  6. Great article – short, effective and shows how time makes all the difference.

    If the Smiths want a set it and forget it type of investment, what would you say are the best options for that?

    • Erion Shehaj

      Hi Gil

      Long term real estate is the closest thing to set it and forget it unless you want to get 1% annual returns or take the risks of the stock market. My point in the opening paragraph is that the returns don’t have to be underwhelming even for a long term strategy which is less “shiny” or “creative” than other more adventurous paths. You can achieve incredible results if you execute a well thought out strategy.

  7. This is a great article, mainly what I got out of it is motivation and of course thinking BIG. Continue to be reasonably aggressive but don’t limit yourself in the capacity to create a successful real estate portfolio.

  8. Thank you for the article Erion, I do believe it’s possible to increase your wealth by $1M in 13 years (given your example) if you buy right, the market grows and you are invested in an area where rentals have a high occupancy rate.

  9. I own about 50 properties in California. Most of these were acquired in the last two year. So I have had a huge appreciation in the properties I purchased. Condo’s the were purchased for 150k in 2011 are now selling for between 300 and as high as 450k. My big question is when do you sell?

    • That is the million dollar question isn’t it?

      The answer (as it usually is in these cases) is, it depends

      Usually, you sell when the market tells you to sell. When you purchased these properties, what was your game plan? Was it a value play because you had a feeling they’d be worth double in a few years? If so, you sell now. You know, bird in the hand vs bird in the bush. Downside is you might leave money on the table but many a million have been lost from investors trying to protect money they never had in the first place.

  10. Sorry but this is a lot of non-sense and at least you have the decency to admit it. Yes you are right if you set your goals low, you achieve low; but isn’t that what a good coach tells all his students? (so not much of a realization there).
    Help me out with this.
    I earn 45K a year, I have nothing left at the end of the month due to my daily life, I don’t have a credit card (cos I can’t afford it), I have two kids (age 3) and a wife who doesn’t work cos she takes care of the house and kids.

    So tell me how to get to more than a couple of properties?
    And where do I get that 400$ in liquid case on 45K a year?
    Maybe you need to lower the bar and make this a little more realistic.
    Your article didn’t even take into consideration credit score, the fact that with rental property some banks want to see 2 years worth of tax return before lending you money, and by the end of these 2 years the interest rate has gone from 2.5 (in texas) to 4%.

    Sorry but I can’t accept this kind of article, it is not educational or helpful.

    • Hi Nona:
      I say this a lot, but you really need to find a good coach – one who can teach you how to buy creatively so you don’t need to go to banks, don’t need need much money, certainly don’t need to worry about credit score (which you won’t when you stop using banks for funding).

      There are many creative ways to purchase, such as finding a property with no mortgage (about 45% of all homes in this country are owned free-and-clear), and many of those sellers will carry back a note so you make the payments to them rather than finding outside funding.

      It is also possible to take over existing financing, buying subject-to the existing mortgage. And other creative ways. These strategies all need to be learned from someone who knows how to do them and someone who knows your specific state laws. It is impossible to read an article and know all of the nuances involved in these techniques.

      Erion explains only one way to create wealth with rental properties. There are so many!

      Here’s wishing you tremendous investing success.

    • Hi Nona

      My clients who have seen these results first hand would disagree with you.

      But I do understand your frustration as most of the writers (and readers) on BP have been where you are, myself included. It’s hard to get started investing when there’s too much month left at the end of the money. I get that. And when you face that situation, and someone writes that you have to set your sights higher, it sounds like a bunch of fluff.

      The hard truth about long term real estate investing is that it’s a strategy that with rare exceptions requires start up capital, good credit, documentable income etc etc. In fact its principal purpose is to grow that start up capital into a much larger capital base so it produces a higher level of income.

      “Ok, great – so what are the options for getting started when you don’t have those means?”

      The first option is to concentrate on saving more money each month. I spoke to a prospective client yesterday that had been saving his money to invest since he was 17 – he’s 43 years old! So it’s definitely a long slog. But you already mentioned that’s not possible at the moment with the current income level. The solution could be to increase the income via a second source.

      In the event that’s not possible, there are “alternative ” or “creative” forms of investing where you could get started with no money and if successful generate the capital to get started. For example, wholesaling or taking properties over “subject to” existing financing. I’m sure Karen could tell you a lot more about those than I ever could. But just make sure that you understand the risks – because there are real risks.

    • Nona, I don’t know your personal circumstances but wanted to share a strategy some friends of mine used to get started. They lived in a paid for single wide mobile home for a few years when they were first married to save up to buy a home. Rather than buy a home they bought a duplex and lived in one side while renting the other. They used this opportunity to save even more money. Fast forward 20 years, their considerable sacrifice allowed them to buy more properties through the years, they now own 27 and no longer need to work.

  11. Over what time frame would you be assuming the properties are purchased?
    Acquiring 9 good properties over the course of 13 years should not be that hard.

    Trying to find 9 at once and being able to get that much capital for down payments and getting any bank to let you take on close to a million dollars in debt on a bunch of properties in quick succession without any prior experience seems REALLY unlikely.

    I fully understand this is meant to be a quick example of what is possible and not a detailed point by point plan to millions. However unless there are some other circumstances (Like acquire 3/year for 3 years while paying off the mortgages ASAP or something that like that) this seems pretty tough to pull off from several angles.

    • Erion Shehaj

      Hey Shaun

      Very good questions. The short answer is that the timeframe for completing acquisitions depends on three factors: Available on hand capital, available supply of properties and investor comfort zone.

      Acquiring 9 properties in a year may seem unlikely but it’s actually not if the capital and investor willingness is present. As an example, one of our clients acquired 4 properties in a 4 month period between February and June this year. So it can be done. But it depends on those three factors.

      The next factors that comes into play is the availability of time and potential changes in market conditions (interest rates etc.). If you have an investor that plans on retiring in 20 years, they can make their acquisitions at a slower place. Instead, if we only have 15 years to go, the acquisitions phase must be completed in 18 months or so.

      I have no issue with a slower pace of acquisitions – except that you can’t count on market conditions to remain the same over a long period of time.

      Thanks for reading and commenting.

      • How did the client that bought 4 in 4 months finance the purchases?
        If they did it with traditional bank financing I would love to hear exactly how they pulled that off since that seems like it would be quite difficult to do, especially if they had any other mortgages prior to this.
        (The people you are describing seem like they would own their own home)

        If they used any more creative techniques (Sub2, owner financing, private lenders, etc.) or paid all cash that would be important to note since that changes the dynamics a bit.

        • Jeff Brown

          Hey Shaun — I’ve had exchanges calling for half a dozen loans in very close chronological order. It’s about the lender quality, and the experience of either the investor or their advisor.

        • Hey Jeff,

          Were these Fannie/Freddie grade loans they would sell on the secondary market or would they be portfolio loans?

          I mean I totally believe you, I am just having a hard time wrapping my head around this working if the loans are conforming.

        • Jeff Brown

          They were boring, vanilla, regular loans, not portfolio loans. The only thing different was the additional 5% down payment requirement, of which I’m sure you’re aware. If you want to get in touch with the lender, send me an email. He may or may not be licensed in your state. He’s the real deal though.

  12. Great article however few people ever account for the realities of owning rental income and you can’t paint rosy financial scenarios like this unless of course you account for these realities and risks…especially for as long as you state here:

    -Vacancies, even extended vacancies (you still have to pay the bank each month even when your unit is vacant).
    -Repairs both minor and major (a tenant in my building where I lived trashed his unit costing my landlord $5700 in repairs…tenant was not collectable, had no money. Last year, an exterior wall and framing needed replacing due to rotted wood and carpenter ants costing my landlord $12,000).
    -Changing economies / demographics / rental rates
    -Costly evictions (in California for example where I live, it can take 6 months to evict and good luck collecting all back-rents due).

    I am often bothered when “gurus” rarely ever include nor discuss the realities of owning rental properties and the headaches and major “sudden” unexpected expenses that always occur. It’s a bit disingenuous. Do you know what it’s like to own 5, 10, 15 properties? It’s no cakewalk (especially if you are managing these yourself). You kind of paint this like its as little work as ordering stocks or mutual funds. It’s work and can be expensive. Few people go into this without realizing the realities of property ownership, dealing with tenants, and most of all having enough cash in the bank to subsidize expenses and vacancies. Rarely is a property ever rented 100% of the time during the entire lifetime of ownership. I’ve owned 8 properties…it`s no walk in the park. I don’t contest the upside of owning real estate but I do contest the hiding of the real life realties of owning it And to make it work you do need to own several of them to offset costs and build wealth.

    Los Angeles, CA

    • Erion Shehaj


      Preaching to the choir, Sir. 🙂

      You don’t know me but I’m not one for rosy scenarios. Au contraire…

      Vacancies and repairs have already been accounted for in my analysis. I’ll grant you that my distilled down summary doesn’t go too far into detail on this but that was on purpose as to avoid making the post too convoluted.

      Changing economies, rental rates and demographics are absolutely crucial. But these changes can go both ways. In other words, appreciation in property values could make your wealth grow much much faster but we don’t account for it in the numbers because we can’t count on it to be there. Same thing with negative consequences. I often find that undefined “what ifs” cause much more wealth to be lost than actual negative changes in the factors you mentioned.

      California evictions? No thanks. 🙂

      With all due respect, Sir – I’m no guru. I actually do what I write about day in and day out. So I know exactly what it’s like to acquire, lease and manage 5 or 10 investment properties for multiple clients.

      Thank you for your comment

  13. This is great post, Erion! I probably am quite late in commenting from BP standards!

    I completely agree with the simplified analysis presented here. It is true that there are many who are not the typical “Smiths” of this article. but then there are many who are very close to the Smiths but they don’t realize what can be achieved using this strategy.

    I am one of those Smiths in fact, and I am executing this strategy (with few tweaks) as we speak. I started out investing 5 years ago in California. The original intent was to own couple of properties and see how it goes. The first 4 years, I went and purchased about 1 property a year. And then beginning of last year, I saw that market started to rise quickly. And at the same time, I had a heart to heart with my wife about the possibility and strategy of making it big by acquiring “several” properties in short order. We then went all-in and acquired 8 more properties (5 in 2012 and 3 this year). All are REO or short-sales. Luckily – given the distress prices I was able to acquire the properties, not only I am making great cash flow already but also I am close to reaching the million dollar in equity gains!

    I agree that my situation was unique in few ways given the larger amount of access to cash, credit (due to high income jobs of me and my wife), ability to acquire properties at distress prices and once-in-a-lifetime gains of 50% in property prices in 18 months. And that unique combination allowed me to implement this strategy and achieve much more impressive results than the strategy here outlines. This does show that not only this strategy is achievable, but you can do even better than the baseline results if you are diligent, tweak the strategy based on your local area and with some luck on your side.

    Some of the specific tweaks I did to achieve much higher than expected results (note that these do come with risks):
    – Instead of 30 yr fixed, I went with 5 yr ARM loans allowing minimum payment: This allowed me to get financing at 2.5% and improving cash flow quite a bit. I used the increased cash flow to invest that back into buying more properties more quickly. That also allowed me to qualify for the loans easier. Note that this is not interest only loans.
    – I took out home equity line on my principal home to get access to much larger amounts of cash than I could have otherwise had.
    – Buy properties only if available at below market value. Needless to say – this makes a big difference on the cash flow (and equity appreciation). This is such an important piece that I would agree to buy all cash in order to get best price (and try to finance later)

    Unfortunately – all the deals are gone from the SF bay area in California and now I may have to go out of state (may be Houston!!) in search of cash flow. For now – I am just sitting tight improving the financing, tenant quality, investing in the updates of the properties, raising rents and everything one can do to improve cash flow and equity from the portfolio I have been fortunate enough to build.

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