New investor rental property SoCal

[Daniel Kirchen]

Hey guys, I am looking into buying and renting properties out in Southern California. I have a mentor who has been in the real estate industry for a long time. He says his way is not the best or the only way to make money but he knows it works. His strategy is to not go for cash flow but the long term appreciation instead. He believes that people will always want to move closer to the beach and home values will always increase in the long run.

His example buying a home every year for 5 years for around 500k a piece. He says homes in good locations double in value on an average of every 10 years. In this example, house number 1 bought in the first year will be worth approximately 750k. Therefore I can pull out the equity and either buy another property or pay down the principal on other properties. Then continue this model so on and so forth.

Is this a realistic strategy? I appreciate the help!!