Is this a good path to wealth?

[James Robert]

Alright guys - tell me, is this a good path? Or should I try to fast track it. Should I just try to acquire a property once a year (rent the old live in the new) and keep doing that for next 10 years and so on or should I try to buy multiple a year? I don’t see how I could even buy more properties than 1 a year because I’d have to put 20% down. That’s alot of money 

[J Clayton Durham]

The biggest thing is to make sure you have positive cash flow, in any amount, on each property you acquire. Remember that you are placing a bet, and if conditions change that are part of what you bet on, e.g., area's biggest employer shuts down or moves, and as a result the tenant pool dries up, you could wind up going bust. When you are starting out, you may only have ONE silver bullet, e.g., the FHA 3.5% loan, so you MUST hit the target with your first bullet, or the werewolf will rip you limb from limb, e.g., lost investment, short sale, damaged credit rating.

So the short version is, get your FIRST property, get settled, then start planning for your second and subsequent properties.  You will find what works for you and the lifestyle you want to have within the first 2-3 houses, i.e, within the first 3-5 years.  For an example of someone who bought a bunch of properties within the first few years, check out the 2nd edition of Mike Butler's "Landlording on Autopilot", I recommend the audio book version, to get an insider's viewpoint.  In his case, he started while he was a cop, and began buying distressed properties at auction, with loans from family, cash advances on his credit cards, and taking out loans on other assets, e.g., his previously paid-off car.  After a few properties, the administrative and handyman workload was too much, so he had to hire some admin help.  His wife was still working her day job, so he relied on her for medical insurance.  After a few more properties, he retired from the police force to do the buy-distressed and get them rentable approach full time.

The property auction market, like Mike Butler used to get started, will vary quite a bit from region to region, and there will be competition for the better properties.  With lots of the real estate "gurus", the way they made their money, their system, "used to" work, 10 or 20 years ago, but typically many details will need to be adapted to be successful in current market, lending, and legal environments.