I came across this article on CNBC: https://www.cnbc.com/2020/02/28/budget-of-millennial-millionaire-who-saves-80percent-of-his-income.html

This guy bought his first house at 23 by using his $19k in savings and a 3.5% FHA mortgage loan ($506k purchase price for the home). He then bought another house 9 months later and continued buying more since then. He claims at 25 years old his net worth reached $1 million.

The article claims he saves 80% of his income. Based on his $150k annual salary from insurance, that would probably be around $80k after tax. Assuming he invested that every year, that's $240k invested in real estate between the time he was 23 and 25. That's if we are being generous, because he claims to have gotten a salary bump (perhaps in those two years).

That implies he made around $750k in rent and capital appreciation in two years (or a shorter time period if you consider they didn't buy a house until 9 months had passed after the first purchase).

Now I know that Seattle home prices have been on a tear for the past few years, but that's a lot of appreciation, right? Let's say he made $100k in capital appreciation on his first home. Sold it and bought a couple more and each appreciation another $100k. Even with these overly generous assumptions, you can't really get to his $1m net worth claim at 25. Also principal pay down over 2 years doesn't really help bridge the gap either.

So are Seattle rental yields just crazy high or what? Or is the story bogus (would have thought CNBC would fact check or something)?

  • 1
    I would say the "luck" here was in being able to buy that first house with less than 4% down payment. Seems like he was able to finagle his way into a government giveaway program.
    – jamesqf
    Jul 10, 2020 at 17:04
  • The article is dated from February. There have been some changes in the stability of the US rental market that might have an impact on a highly leveraged real estate investor between February and now.
    – user662852
    Jul 10, 2020 at 17:52

1 Answer 1


It certainly seems plausible to me - without spending too much time on the math, there's a few other details that may make it more believable:

  • The wife also brings in "six figures" that they "almost entirely save" - so there's another $100,000+ of income that you don't include.
  • The article doesn't say how much is owed on the properties. It's possible that they're defining "millionaire" as having a million dollars in assets, which is not correct. Although the article does say they have a "net worth" of $1 Million, but that term could be misused as well.
  • Each house was likely bought with a mortgage, so a lot of leverage was probably involved (which multiplies return but also multiplies losses and increases risk).

So with a "take-home pay of $350,000" and leveraged property appreciation, it's certainly possible.

To answer the main question, I wouldn't call it completely luck. The article doesn't say how much renovation had to be done on these properties, how much "sweat equity" was involved, but there are certainly some wise moves like buying a duplex and renting out half of it, converting the garage into a studio apartment, etc. So there is evidence of good financial decisions. Also, one rule of thumb for real estate is that most profit is made on the buy - meaning that the profit comes from getting a "good deal" upfront, not in rents. So if he;'s a good negotiator and took the time to look for cheap homes that could be fixed up, that could be the main source of his wealth.

Certainly there's some "luck" in getting good renters, being in a "hot" market etc, but I wouldn't discount the the skill involved at all.

  • Later in the article it does mention $3.1 million in mortagages on properties valued at $4.4 million.
    – chepner
    Jul 10, 2020 at 14:19
  • Your first point: The wife's income is allegedly placed in another account and doesn't count towards the net worth number supposedly. Your second point: The mortgage is in the article. Your third point: The leverage math doesn't really get you there. If anyone is interested, I found another forum where the rental numbers were discussed. Their claimed net rental income is a complete sham based on the property values. These guys making stuff up and total lies and exaggeration. Jul 10, 2020 at 17:32

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