I am being told by this guy that the following is a guaranteed-to-work way to become rich and retire early.

He says to start early. 20 years, or near that age. Buy 1 house a year. Rent it out. Start selling these houses after 15+ years.

He says this in a video on youtube which has thousands of views and many upvotes.

I don't understand how this is even physically possible. How do you buy 1 house a year? Unless you are filthy rich already, you can't pay cash and need to take a loan from the bank. But even then you need to make enough money to pay a downpayment every year. But even if you are also capable of that, what bank would be willing to give you that loan? Won't they just take a look at your finances, realize you're already way in over your head with multiple other mortgages, and refuse to loan to you?

  • 91
    "guaranteed-to-work way to become rich and retire early" = click-baiting. If there was a guaranteed way to become rich, it would be far more common. This is an interesting concept I hadn't heard of before, but comes with very high risk. That risk in and of itself prevents there from being a guarantee. Views and upvotes on a video add nothing to the credibility of the information given, just whether or not people are buying whatever he's selling.
    – BobbyScon
    Commented Aug 8, 2018 at 15:34
  • 35
    Anecdote: the "self" in "self-help" usually refers to the self-help material author. Commented Aug 8, 2018 at 16:38
  • 98
    Reminds me of the joke about self-made millionaires: "When I started out I only had $27 in my pocket, $500,000 in my other pocket, and a vast family fortune to fall back on."
    – Moyli
    Commented Aug 8, 2018 at 17:06
  • 40
    "After years of disappointment with get rich quick schemes, I know I’m gonna get rich with this scheme - and quick!" - Homer Simpson Commented Aug 8, 2018 at 17:14
  • 13
    @AlexR Right, your friend probably calls himself a redeveloper, landlord or property manager. Most (who are still in business) don’t leverage themselves to such an insane degree. It’s good honest work, but anyone who was in the business in 2008 can attest that it’s no guaranteed way to get rich quick.
    – Davislor
    Commented Aug 8, 2018 at 19:50

9 Answers 9


How do you buy 1 house a year?

You save up the money you make from the rent for a down payment on the next house. Then you save up the money from those two houses and buy two more the next year (or one bigger one). Rinse, repeat.

what bank would be willing to give you that loan?

You'd be surprised... This is essentially a major cause of the 2008 financial crisis

The problem is (as everyone saw in 2008) that it doesn't take much for this house of cards to come tumbling down. A few missed months of rent, a few unexpected major expenses, or a drop in home value before adjustable mortgages reset and the loan can't be refinanced, and you lose EVERYTHING. You have to give up some houses in foreclosure, which reduces your income, which means you can't make other mortgage payments, and you lose them in foreclosure, etc.

These people on YouTube and in seminars in hotels have no skin in the game. They are just trying to SELL you a plan that DOESN'T ALWAYS WORK. If the plan was foolproof, why wouldn't they use it themselves rather than peddling their scheme and INCREASING their competition?

To be fair, I'm NOT saying that it's horrible to buy rental real estate with debt, or that it's impossible to succeed doing so. I'm more refuting the claims of these get-rich-quick-scheme peddlers that it's safe and fool-proof. Using debt greatly increases risk, and reduces absolute returns (since you're spending money on interest payments).

  • 7
    I am aware of the risk involved (I always say, for every person telling you their success story, think about the thousands of people whose failure you never hear about), but this advice seemed in particular weird to me. Where I live (Denmark), banks would never dish out loans like this. Maybe in the US it's different?
    – Okaei
    Commented Aug 8, 2018 at 14:26
  • 4
    Yes it is (and it's better than it was before 2008). Was the YouTube guy in Denmark as well? I can't speak to how it would work there.
    – D Stanley
    Commented Aug 8, 2018 at 14:30
  • 22
    The piece that might help is the discussion of price to rent ratio. I can see that in a nearby town, houses that sell for $1M will rent for about $4000/mo. In another town, I bought and renovated a 3 family for total $180K, and it rents for a total $2000/mo. The $1M home can't be part of OP's plan. With good tenants, the 3 family might be. One cliche is that real estate profits are made at purchase time. If you start by needing to feed the property, it's tough to turn a profit. Commented Aug 8, 2018 at 15:27
  • 2
    @DonQuiKong Debt multiplies your relative returns. If you get $2000 from rent but spend $1000 on interest, your absolute return is reduced. That's why I chose that modifier.
    – D Stanley
    Commented Aug 8, 2018 at 18:39
  • 2
    @DStanley yes, but it reduces absolute returns compared to the same investment without debt. However, the same investment without debt is not an option. So you're comparing to something impossible. Compared to investing the money one actually has, absolute returns increase (if return > interest).
    – DonQuiKong
    Commented Aug 8, 2018 at 20:55

20 years, or near that age. Buy 1 house a year.

As you probably know this is near impossible to do. Have around 20 years and be able to get loan for buying house.
You are on right track that you would need a rather large amount of money to start. For example this "fool proof" method don't mention time when you're spending money on property (paying rates) but not renting it yet.
Avoiding it would require buying rentable house (with furniture) on Monday and renting in on Tuesday. One month without rent means you are one month lighter of paying mortgage from your own pocket.
He probably don't mention itty bitty thing I've seen in all bank deals when you have less than 20% of downpayment - you cannot RENT such property for at least 3 years. If bank catch you doing that you are required to pay back whole loan at once within 30 days.

My brother who is working in bank, and is earning twice the "average income" AND is buying proprieties to rent and sell said he can't financially go above 3 houses/flats. It max out his credibility, his financial stability and passive income. With 4 flats he would be spending more money than he's earning.

This is the same case as those House flippers, gold diggers and storage wars. They are earning money on selling those dreams not actually doing them.

  • 9
    What area has the "can't rent it out for 3 years after buying" clause? I have never heard of that before. Commented Aug 8, 2018 at 15:53
  • 12
    @SnyperBunny - In the US (according to Wells Fargo), you need mortgage insurance (PMI) on mortgages with less than 20% down-payments. Typically, you can't get approved for PMI on an investment property. wellsfargo.com/mortgage/buying-a-house/…
    – BobbyScon
    Commented Aug 8, 2018 at 18:21
  • 2
    @SnyperBunny - So many questions! ;-) I don't have all the answers, but once you've met the 20% requirement to release PMI (or not have it), it's only reviewed if you try to refinance. With housing market swings, too many people would be in and out of PMI for that to be manageable. As far as using other equity, that would likely be acknowledged as part of the new loan application. It can probably be done, but I couldn't tell you the specifics.
    – BobbyScon
    Commented Aug 8, 2018 at 19:18
  • 5
    @SnyperBunny To "pull equity out of a house," you have to have equity. Consider if you were trying to buy a $100k house (to make the numbers simple). You need $20k down to avoid PMI, so you need $20k in cash. "Pulling equity out of the old house" is actually the process of getting a loan for $20k, backed by your old house. You can only get that loan if the investors are all content with you adding that lean on the old home. As a general rule, you wont be permitted to take such a loan unless it leaves 20% equity remaining in the old home.
    – Cort Ammon
    Commented Aug 8, 2018 at 22:58
  • 15
    If your previous home was also a $100k home, that means you need to have $40k in equity in the old home to pull this off. $20k to back the loan for this new down payment, and $20k to keep the holder of your existing loan happy that their investment is secure. If you're paying off 40% of a $100k house quickly enough to pull a plan like this off, you don't need the plan. You've already found a way to get rich, with far less risk than this plan offers.
    – Cort Ammon
    Commented Aug 8, 2018 at 23:00

Whenever I learn about some scheme for making money, I always ask myself:

  1. Why aren't they doing this themselves?
  2. Why are they teaching this?

It's likely they're teaching it, and spoiling it, instead of doing it themselves (or founding a business) because the scheme does not work and they make more money teaching than doing.

I always think from this angle even before fully hearing what someone suggests.

With this in mind, I'd dismiss that guy without examining a proposal.

  • 3
    philanthropy, you skeptics just can't get it O:-) Commented Aug 9, 2018 at 12:21
  • 16
    This is also a great response to MLM (multi-level-marketing schemes). Why are they trying to recruit me to sell a product when they could just be selling it themselves? Recruiting me actually makes more competition for their "business". The reason is they make more money recruiting than they do selling.
    – stanri
    Commented Aug 9, 2018 at 13:31
  • 1
    @Stacey This is an excellent point. I suppose it also reveals a better way to run an MLM scheme.. by making it look like the conned are being recruited as employees. Commented Aug 13, 2018 at 9:19

It's possible. But a lot of layers of swiss cheese have to align at once (or rather, be aligned by a person with mad skillz).

  • First, you must make reasonably good money - i.e. a highly skilled technical job, or a manager. Can't do this on Walmart income.
  • You must already be content to live a lifestyle well below your income, meaning you are already banking much (half?) of your income. You will need this habit, and cash flow reserve, to cover many glitches and problems that will come up.
  • From the above, it'll really, really help to have some startup cash in the bank. You can only use initial-homeowner incentives once; after that expect to put 20% down on every house unless you can find partners.
  • You must pick an area where house prices and the rental market lend themselves to doing this. You won't be doing it in San Francisco, for instance.
  • You must have a deep understanding of your rental-property market, and again, some places the market is simply against you.
  • You must be skilled at the financial angles of the home-rental business; you should already have developed a pretty complex spreadsheet that lets you drop in home price and market rentals and have it pop up your pretax and post-tax income from that property.
  • You must be highly competent about picking houses with the right combination of very favorable sale price and good fixability. For this, it helps to have a great network of friends or partners, and be a really good sleuth. That's what happens behind the curtain of all those "fixer" shows on HG channel: they have extraordinary resources for finding houses available at lowball prices. You do not.
  • You must be pretty good at fixing up fixer-uppers: either you're handy, family is, or you have great partners. You can't buy a fixer, then muddle around for 9 months crawling through fixing it, or get tripped up with permit or entitlement issues, etc.
  • When you get the 3am "Toilet is leaking" call, you better be able to fix it in 3 hours. Home Depot is closed.
  • You must be competent at selecting tenants. There are tenant sharks who hunt down newbie landlords and exploit their unfamiliarity with tenant law to trick their way in, then refuse to pay rent and force you through the most byzantine eviction process possible. Watch some of the "bad tenant" TV shows on Youtube. There are also tenants who just aren't much good and can do way more damage than the deposit covers. Get one with bad pets, you'll be replacing more than carpets.
  • You must understand landlord-tenant law so you don't do something moronic and cost yourself a ton of money, or give a shark an extra 6 months of free use of the home.
  • You need to know tricks of the trade like "paying your tenant to leave will keep him from kicking out all the drywall".

So yeah, if you poured Robert Allen into a 25-year-old body, gave him a $70k/year software engineering job with good upward path, he'd exactly buy a house a year and be retired at 40. But for you, expensive mistakes can sink you.

  • 2
    I'm glad for you, it sounds like you have great cats and are absolutely fantasic cat parents. I am not here to argue about cats, so edited. Commented Aug 13, 2018 at 0:01

a video on youtube which has thousands of views

Wow, thousands of views! On a site with 1 billion users! He must really know what he's talking about!

There is rarely a way to make tons of money with no risk. If there was, the market will often arbitrage it until it's back to lower levels. Of course real estate can be profitable, many fortunes have been made from it. But this particular strategy has obvious pitfalls:

  • House prices could crash leaving you underwater.
  • You could overpay for a problem house due to inexperience.
  • You might have trouble finding good tenants, leading to lost rent income and costly repairs.
  • Banks might refuse to give you loans when you already have several mortgages.
  • It is a lot of work to shop for houses, to market rental property, to deal with issues of tenants. It's like a job - it is a job.

In my country (US), banks do not give mortgages unless the interest would be less than 30% of your income. So you would already have trouble buying the first house, unless you start with financial capital. Even if you do get the first mortgage, it will then show up on your credit history. Subsequent loans might be refused simply because you have too many loans out already.

If you did have a lot of capital so as to not require the loans, it might be a bit easier. But if you have the money to buy houses outright, you might as well invest that money in something like the stock market. In the US, stocks return about 7% yearly while real estate is something like 2%.

Ultimately, though, it comes down to personal aptitude. Real estate is a job just like any other job. You can be successful with it if you have the right mix of education, talent and experience. Not everyone is good at judging how underpriced/overpriced houses are, not everyone is good on house maintenance, not everyone is good at dealing with renters. If you do suceed with any house-based scheme, it's probably because you have a knack for it, not because you found out about this guy's one simple trick.

  • 2
    Here (France), incoming rent counts as income, so such a scheme does work. There is a delay though, as taxes are paid one year late and income proof relies on tax from previous year, so incoming rent only becomes relevant 2 years after it starts. All in all, 1 house every 3 years is doable and is profitable. Is it a good idea? Well, it's still subject to most of the risks. Might be worth it if you can pull it off while still diversifying. It's more of a "get from rich to richer" scheme than "get from poor to rich" scheme.
    – spectras
    Commented Aug 10, 2018 at 11:15
  • 1
    @spectras in the US, rent is counted towards income as well, however, typically, banks will only count 75% of the rent. Also, each mortgage increases your debt load. Given that the max debt to income ratio is about 50%, you will quickly reach a maximum number of properties that you could finance with conventional loans. The way around this for the budding real estate investor is to start small, then start flipping the properties you have for larger ones which already have tenants leveraging the appreciation in value for downpayment on new loans.
    – iheanyi
    Commented Aug 10, 2018 at 23:25
  • @spectras another limiting factor is that banks typically require that you have cash reserves to pay all recurring debt costs for up to 6 months. As you can imagine, that means the cash you need on hand keeps growing with each property you buy (or attempt to buy). This makes it harder to sequentially move year to year to buying a new property using just the income from the previous ones.
    – iheanyi
    Commented Aug 10, 2018 at 23:27
  • @iheanyi thanks, it's interesting to see how banking practices differ from one country to another. The basic principle of debt load applies here too, but the way it is counted (100% of the rent) makes it less of a limiting factor, the 2-year lag usually slows you enough that first house is fully paid before debt load becomes relevant.
    – spectras
    Commented Aug 11, 2018 at 13:56
  • @spectras The problem is that banks look at total interest payments vs. total income. So even if the loan you are asking would be less than 30% of income, they might refuse because combined with your oustanding loans you would go over 30%. Also usually rent income is mostly offset by the mortgage payments.
    – Money Ann
    Commented Aug 13, 2018 at 18:30

Great idea!

An enterprising individual might recognize the money-making potential of this investment strategy. Since having more capital means being able to buy more properties, more properties means more rent, and more rent means more profit, it would be a good idea to raise as much capital as possible.

Why stop at one house per year? Why be limited by bank credit approvals? This enterprising individual might create an organization and offer a deal to other people: people buy shares in the organization, and that capital is used to buy more real estate. In return the investors receive share of the profits.

By pooling the capital of many individuals, a quite huge sum of capital could be generated. It should be possible to invest not only in homes, but in much larger things, like shopping malls!

It's not a new idea: it's called a real estate investment trust (REIT). They come in all kinds, most likely you can find one for any specific real estate segment you like.

Looking at the historical returns, you'll find while it is possible to turn a profit with this method, it's nothing fantastic. It might make a good component in a diversified portfolio, along with the more usual stocks and bonds.


I am not familiar with Denmark but in the US there are a few things that could help make this strategy work though it is by no means "guaranteed-to-work".

  1. You can buy a home on leverage as low as 0% and many people get into their homes with FHA loans at 3.5% down.
  2. Banks generally will count 70% of your rental income into your debt to income ratio to help you qualify for the next home purchase.
  3. Bank can loan up to 10 residential loans(if it is selling the loans Fannie though many banks have their own limit, 4 is popularly repeated). Banks offering portfolio loan (keeping the loan instead of selling to Fannie) can give you as many mortgages as they think you can safely afford. If unable to get a personal mortgage the older mortgages can be refinanced into commercial loans lowering your personal loan count and re-enabling you to buy more.
  4. You don't have to get your loans through banks private citizens can carry the note on your home.

One home a year might be impossible at first but if you set aside the cash flow from your property for the next down payment you will see a compounding effect. You might need to save four years for house 1 and live there for four years to save for house 2 but house 3 will take you three years to save for since you have the cash flow from house 1 accelerating your savings house 4 will take you two years... get enough cash flowing houses and you can be buying a new place as quickly as you are comfortable.

Finding cash flowing houses, picking good tenants, good Property managers, and good contractors is tough. There are lots of places where you can get slowed down or derailed. Its not easy but it is possible.

  • wellsfargo.com/mortgage/buying-a-house/… At least Wells Fargo requires 20% down for an investment property, and they claim your rental income doesn't count until you have 2 years of property management experience. This suggests buying your 2nd house in year 2 or 3 would be difficult as you'd need to qualify for a second mortgage based on your non-rental income only (and have the cash for a 20% down payment).
    – jbch
    Commented Aug 10, 2018 at 19:26
  • There are many more bank than Wells Fargo. I would recommend talking to smaller local institutions to find a more accommodating lender. Commented Aug 13, 2018 at 12:39

Yes, this is a brilliant get rich quick scheme!

Study his plan and his video closely. Then come up with some variations to make your own plan. Produce your own video. Get gullible people to pay you for these videos or the books you sell.

The plan itself, of course, is absurd. Most 20 year olds struggle to come up with a down payment for one house, never mind for another one every year. Owning a rental property is far, far from an easy, guaranteed money-maker. Trust me, I owned a rental property for 10 years. I lost money on it every year. Every. Single. Year.

Sometimes you can't find a tenant and the place sits empty for months. But you still have to pay the mortgage. And while if no one is living in it the utilities will be minimal, they won't be zero -- especially in the winter if the property is someplace cold, you have to pay to keep it to at least a minimal temperature. You have to keep the yard mowed, etc.

Every time you get a new tenant you have to clean the place, usually do a bunch of repainting.

Anything that breaks, you have to get it fixed. If you're reasonably handy and live near the property, maybe you can do it yourself. Otherwise you have to hire someone.

Often tenants will call with nonsense maintenance problems. I had a tenant who complained that the water heater wasn't working. I had to call a plumber to look at it. He found that the knob was set to "low". He turned the knob up. Problem solved. His bill: $200. I don't blame the plumber. He had to drive to the house, figure out that that was the problem, and then after turning the knob hang around long enough to be sure that was it. $200 was a reasonable fee for his time. But.

Sometimes you get a tenant who decides not to pay the rent. So you evict them, right? In my state, theoretically I could evict a tenant with 3 days notice. In practice, they don't leave. So you have to take them to court. The court will schedule a date in 2 to 3 months. If they're not paying the rent you probably win the case easily. Great. Now you have a court order. They still don't leave. With the court order you can get the police to go order them out. They'll get around to that in another month or 2. So it's like 4 or 5 months between when you decide to evict them and when they actually leave. Of course they don't bother to pay the rent in that time. Why should they? You've already started the eviction process. They may decide to trash the place for revenge on you ordering them out.

Some tenants trash the place because they're mad at you for some reason, or just because they're slobs. I had one tenant do $10,000 worth of damage, including trash all over the house about a foot deep that had to be hauled away, feces on the walls, carpet destroyed, light fixtures destroyed, etc.

My point is not that it's impossible to make money as a landlord, but that it's not a guarenteed get rich quick scheme. It requires a specific set of skills like any other business. If you're good at it, I'm sure you can make money. If you're not, you can lose a bundle.


This particular scheme (getting houses at a rate of 1 per year) is obviously not feasible for most people, or most people would already be doing it.

I know one scenario which conceivably could work, in a fashion. Not for getting rich, but to structure your financial life. That is, in a nutshell:

  • Try to get any kind of house, flat, etc. as early as possible, paying as much of it as you can (getting as small a loan as possible).
  • It must be one which is rather shabby or in need of repairs, of a kind which you can do cheaply. This means that you need to have the time, know-how, machinery etc. to perform the labour, and that you need to be inclined to actually do it as well.
  • So far, you're simply a random house owner like everybody else (not rich yet, and probably paying a lot to a bank; though a bit less than everybody else, as you got an el-cheapo house).
  • Live in the house, fix/improve it as much as possible, and then be ready to sell it as soon as possible, when the market is such that you can recoup all your investments (and then some); also, at this time you need to have another house lined up to buy; this also needs to be shabby/in need of repairs. Make it so that the difference turns out in a way where you don't pay that much more loans afterwards than before.
  • Rinse, repeat.

With a bit of luck, this works out so that you, at the end of your working life, end up with a very nice house, no more loans to pay, while having been able to afford those rather cheap(sic) houses, although you had to work a lot in your spare time.

With huge luck, you break even before your body is done for, i.e., you may have paid back your loans at some point, and then actual make money from fixing and re-selling the properties in which you live, or eventually get a second house to do the same.

The problem with this is obvious: it takes loads of luck and hard work to actually find suitable houses, then to actually get them (everybody else will, as well), and then to find a buyer when you need to upgrade (say, when your family grows). Also, many people find out that fixing/repairing houses, especially if you live in them, is very hard and tiring work, and you can really miscalculate costs, thus demolishing all your plans easily...

  • Works a lot better if you save up to afford it without the loan. You need to compare monthly rent to interest on that loan and when you'd pay it off. Most people are better off not borrowing.
    – JKreft
    Commented Aug 9, 2018 at 13:12
  • @JKreft, I have added half a sentence to that affect to the answer.
    – AnoE
    Commented Aug 9, 2018 at 13:21
  • 5
    Unless you really like home repair (enough that you would do it as a hobby without pay), you could just get a second job instead... Commented Aug 9, 2018 at 13:32
  • @user3067860, yes, that is what I am pointing out in the last paragraph about why this scenario is a fallacy for most people.
    – AnoE
    Commented Aug 9, 2018 at 14:06
  • One of my employees has cut their hours way back in the last few years, because they've finally started making a profit with a modified version of this plan. Instead of homes, he buys run-down mobile and manufactured homes, fixes them up, sells (mostly) or rents (I think about 3 now) them, and buys another "el-cheapo" one for himself. So that's another option, with a lower barrier to start
    – user73687
    Commented Aug 9, 2018 at 20:32

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .