Buy One Property a Year and Retire Early?


There is a physician that I know, Dr. C., who is well-known to be a very savvy real estate investor. Everyone thinks he lives the good life, and he’s at the age that most doctors start thinking about retirement. In one of our conversations, he let me know that he had technically retired years ago but had continued working simply because he enjoyed it. What doctor wouldn’t want that? So, of course, I asked him, “How did you do it?”

He readily admitted that he’s not particularly savvy or smart when it comes to investing. He just listened to the advice of a mentor:

“Buy one real estate investment property a year.”

I tried to nail down some specifics (ie. condo, house, apartment building). He simply stated, “Doesn’t really matter, whatever you can reasonably afford, just do it.”

So I went home to see what that might look like and tried to model it out on paper.

Here’s my disclaimer: this is my N=1, my one simplified example.

This might be a good time to quickly address the oft-debated simple vs complex model argument. I think the answer is that no one can definitively state which model truly has a better predictive value. This quote by a well-known British statistician, George Box, sums it up perfectly,

“All models are wrong, but some are useful.”

I believe this pertains to both real estate and stock market models. However, what we do know is that simpler models are easier to apply and to take action on, mostly because you feel you can replicate it.

Buy a Rental Property Every Year for 10 Years

With that in mind, here is what it might look like if you tried to buy a rental property every year for 10 years. Here are the rules of this model:

  1. Each property purchased is a single family home.
  2. The purchase price stays constant at $100,000 (to keep the numbers round).
  3. Each year requires a 30% initial investment ($30,000 in this case).
  4. The home loan starts at $70,000 (= $100,000 purchase price – $30,000 investment)
  5. The max # of home loans at any one time is four. According to Fannie Mae / Freddie Mac, you can possibly have up to ten residential home loans, but after four it becomes a bit more difficult to get additional loans, so decided to keep it at four.
  6. Cash flow per property is $400 a month – vacancy, property management & future maintenance have already been taken into account. This number was chosen because this is very attainable, as proven by my own rental property.
  7. All the cash flow throughout the year is saved and goes back into paying down the home loans at the end of the year.
  8. Once a property is paid off, the property cash flows $800/month. That’s because there is no longer mortgage and interest to be paid.
  9. If you have the max 4 properties, the $30,000 initial investment goes towards paying down one of the loans.
  10. Referencing the Case-Shiller index, used 3.4% as the appreciation rate.

What is not taken into account in this model:

  1. Equity pay-down over time, which works significantly in your favor but can get confusing for the calculation.
  2. Rents increasing over time, which would work in your favor
  3. Increased maintenance over time
  4. Any cash flow changes
  5. Taxes
  6. Depreciation
  7. Purchasing your own home

After all that, here it is. If the details become excessive, skip to the bottom for the summary.  (At this point, you might want to have one window with the graph open on one side and one with the explanation on the other if you want to follow along easier.) 


Year 1

  • $30,000 invested and you have your first rental property. Congrats!
  • Cash flow is $400 a month ($4,800/year).
  • At year-end, this $4,800 reduces Home #1’s loan to $65,200 (= $70,000 – $4,800).

Year 2

  • $30,000 invested and you have your 2nd rental property.
  • 2 cash-flowing properties at $400/month results in $9,600 for the year.
  • At year-end, this $9,600 reduces Home #1’s loan to $55,600 (= $65,200 – $9,600).

Year 3

  • $30,000 invested and you have your 3rd rental property.
  • 3 cash-flowing properties at $400/month results in $14,400 for the year.
  • At year-end, Home #1’s loan is at $41,200 (= $55,600 – $41,200).

Year 4

  • $30,000 invested, you now have the max 4 rental properties.
  • Cash flow is $19,200 per year (= $4,800 x 4).
  • At year-end, Home #1’s loan is $22,000, the rest are still $70,000.

Year 5

  • Since you have max 4 houses, your $30,000 investment goes to paying of the rest of Home #1, and the remainder reduces Home #2’s loan to $62,000.
  • Cash flow is $24,000 ($800/mo for home #1, $400/mo for homes #2,3,4)
  • At year-end, Home #2’s loan is $38,000.

Year 6

  • $30,000 investment buys Home #5.
  • Cash flow is $28,800 ($800/mo for homes #1-2, $400/mo for homes #3-5).
  • At year-end, Home #2’s loan is down to $9,200.

Year 7

  • Since you have the max 4 houses, your $30,000 investment goes to paying of the rest of the home #2, and the remainder reduces Home #3’s loan to $49,200.
  • Cash flow is $33,600 with 2 paid off houses and 4 cash flowing at $400/mo
  • At year-end, home #2’s loan is $15,600.

Year 8

  • $30,000 investment buys home #6.
  • Cash flow is $38,400.
  • At year-end, home #3 is paid off and remainder goes to home #4’s loan.

Year 9

  • $30,000 Investment buys home #7.
  • Cash flow is $48,000.
  • At year-end, home loan #4 is paid off, and remainder goes to home #5’s loan.

Year 10

  • $30,000 Investment buys home #8.
  • Cash flow is $57,600
  • Pays down house #5

Summary After 10 Years

  1. You own 8 rental properties at this point. You were very close to your goal of purchasing one a year and you didn’t need to violate the max four loans at a time rule.
  2. Four homes are completely paid off, four still have mortgages on them.
  3. Cash flow by end of year 10 is $57,600 a year ($4800 per month). If you had a $2 million portfolio at this point, and started to draw down 3%, you’d have a very similar cash flow.
  4. Again, roughly figuring out the appreciation of each home using a rate of 3.4% yields total equity in the properties around $750,000.
  5. Total investment has been $300,000.

My Thoughts

  • You can start seeing a snowball effect happening although it seems to just be hitting its stride by year 10.
  • This is something most physicians could replicate.
  • The cash flow is starting to amount to something substantial by Year 10. What would that cash flow by year 10 allow you to do? Would it cover educational expenses for your child? How many shifts would that allow you to give up?

Just for fun, I modeled it out to 15 and 20 years. The problem is that the model starts to break down because the cash flow becomes so overwhelming and I wasn’t sure whether to buy several new homes at a time or roll some of the cash back into the loans. But hey we’re just having fun here, so here are the results:

Year 15

  • You own 12 homes, 10 of which are paid off by year-end.
  • Cash flow is $100,800 a year ($8,400 a month).
  • Equity in the properties is around $1.4 million.

Year 20

  • You own 19 homes (very close to one a year!), all 19 of which are paid off by year’s end.
  • Cash flow is $172,800 a year ($14,400 a month).
  • Equity in the properties is around $2.8 million and growing.

I think it’s worth mentioning that if you were able to amass a nest egg of $6 million dollars and you withdrew 3% a year, that would put you somewhere in the range of $180,000 your first year.

At this point, I think it’s pretty safe to say that working is relatively optional and total retirement is a possibility. That’s some serious passive income! Imagine starting this when you’re in your early to mid 30’s when you first became an attending physician.

So Did I Follow This Advice?

I’ve had to play a little catchup but I’ve been fortunate to be able to get enough rental units to match the number of years I’ve been out an attending. Okay, that’s only five, but I’m right on track to buy one rental property per year. I’ll keep you updated…

Let me know what you think…



  1. Just wanted to say “Thanks” for this article.

    I come back to it every couple of months to read through it again and get a little inspired every time, although not enough yet to take the actual plunge into real estate investing.

    What scares me is the research – how do I know the right house/multi-family unit to buy, what to rent it for, what to expect of expenses, etc., etc. Everyone says, “Do your research,” but where to start? I’ve seen your book recommendations, but it all still feels a little daunting.

    Anyways, keep up the good work.

    • You’re welcome. Yes, it can be daunting, especially your first one. You can read all you want, but it’ll never guarantee you the perfect investment. You’ll also never learn as much as when you actually jump in. People can easily get stuck in “analysis paralysis” and never pull the trigger on anything.

      I’ve found a good transition is by starting either in crowdfunding or by buying a rental property through a turnkey operator. That way you have a helping hand along the way. Yes, you might pay more in fees, but I think it’s well worth it to have someone to rely upon for day to day operations and issues. It’s also easier on the schedule for a busy doc.

  2. Thank you so much for the great article! I am still a 2nd year derm resident but can’t wait to be an attending/be able to moonlight during 3rd year so I will be able to have more $$ towards investing/retirement (25% of $65K is something but not a lot).

    I was hoping to ask a couple of questions:
    1) Do you think that with the taxes/deprecation/maintenance the overall returns of investing in a home at around year 10 or so is better than just in the stock market with diversified low fee ETFs?
    2) Do you currently do the management of the properties yourself or use turnkey operators to decrease time/headaches? If you manage them yourself does it take a lot of your time each month?
    3) Are the rental units that you buy near the area you live vs far away? (I unfortunately live in an area where $100,000 rental properties are impossible to find)
    4) Are there any great books/articles that you would recommend for learning more about real estate?

    Thank you so much!

    • You’re welcome. Wish I was as dedicated and knowledgeable during my residency. Here you go:

      1) Lots of assumptions here and it depends on a lot of factors like market timing, but in short – yes. In owning investment real estate, average returns of 10-20%+ are reasonable, factoring in all the ways you make money in real estate – cash flow, appreciation, mortgage pay down, tax benefits, use of leverage. However, does require more work.
      2) I manage some and I have property managers for the others. I’ve bought out-of-state with and without turnkey operators. Turnkey does make it easier but it doesn’t relieve you of the duty of doing your own diligence. Whether I use management depends on how much work I think it’ll take. General principle – I want all my properties managed by someone else freeing me up to make the bigger decisions and focus on optimizing my investments & find new places to invest.
      3) I’ve invested in both – 10-20 min drive from my house as well as investment properties in different states only accessible by a 4-5 hr flight. I can’t find $100k properties near me as well, but I was able to buy 6 units for $800k which comes out to $133k a unit.
      4), Books found here –

  3. I enjoyed reading this example of how one can retire with this method.

    We are on our path to financial independence with real estate playing a major role. Our goal is to have 20 rentals within the next 10 years and we have 3 so far. Let’s hope the 10 loans per person don’t change, because we are planning to leverage each one of them. But I can see how this example can help us get to our goal of $x per month without taking on too much leverage.

    Thanks for this write up.

      • Thank you! Yes, we’re focusing on single family homes only at the moment. I think once we get to the point of being “accredited” investors. We may look into investing in apartment syndications. Or we can 1031 exchange our SFHs into multi units. I would love to get some deals on 2-4 unit properties but that’s hard to come by. Our main focus is turnkey investing because we just don’t have the time to find deals.

  4. Where do you buy your properties? That’s pretty amazing to buy a 100k house and cash flow $400 a month, most times $100 a month is a struggle. Do you manage yourself? Where are you finding these? Thanks

  5. That’s a bold goal to have to own 20 rentals. I am just getting started and looking forward to acquiring my first property in the next couple of quarters. How does one find good turnkey operators? Are there any good recommendations or any good resources for it? Thank you.

    • It’s definitely doable. The first few are the hardest and then it’s like a snowball. Turnkey is just one way to go, but personally I don’t feel it’s a bad first step. You have to go off reputation and word of mouth, and ideally the experience of someone you trust. I’ve only used Homeunion and had a good experience, but I’ve heard good things about Roofstock and Memphis Invest as well. I’ll try to come up with some good content for you.

      • It definitely gives more courage to hear from people who have already done it or have already started on the path. And yeah, like you have mentioned earlier, lately been thinking Turnkey might be a good way to start off on this journey and learn along the way to become more self reliant. Truly appreciate your response and look forward to any more content on this. Thank you.

    • Hi Ruth! Owning 20 rentals is a feasible goal. Like PIMD said, the first few are the hardest and it gets easier from there. I think the fear goes away and the amount of knowledge that’s obtained after the first few leads you to act quicker and snowball into more properties easier.

      For turnkey operators, it is definitely a lot of word of mouth and reputation as mentioned above. My go to resource for learning more about turnkey was Get Rich Education Podcast with Keith Weinhold.

      I personally invest with Mid South Home Buyers out of Memphis and I love their service from A to Z, they’re definitely top notch.

      There are so many ways to invest in real estate, and has just been the easiest. We would love to get into other areas of investing such as flipping or buy and hold, but just don’t have the time or energy to do all of that at this point in our lives. And when we become accredited then onto bigger deals hopefully. Good luck with your first purchase!

  6. lot of assumptions!
    just one or two breakdown of air conditioners, or 2 or 3+ months of vacancy will screw up your cash flow plan.
    where your doctors find time to deal with tenants?
    it’s never a Nine to Five workday for doctors.

    • Well, an important part of investing is setting up a small maintenance reserve. Yes, long term vacancy will screw it up but I think’s safe to assume that rent should increase with time. Not a perfect model, but should at least get you thinking. With management, the doctor doesn’t need to deal with tenant issues. I have an out of state rental and I’ve only been notified for move out and move in.

  7. Great article. Keep in mind also that if you can learn to buy properties creatively you can often eliminate the need for a bank allowing you to be less restricted in buying rentals.