Skip to content

Two Different Approaches to Real Estate Investing

This is a guest post by Corey from 20’s Finances. He is quite a skillful writer and is fairly new to the blogging world. Enjoy his post and make sure to drop by his site and have a look around!


Whenever a great investment opportunity comes my way, I first do my research.  Then I review my findings again before jumping on board.  That is what I did when it came to Real Estate.  It was just over a year ago that my dad decided to invest in real estate.  He bought his first rental home after prices fell.  Many people point out that real estate investments are the most secure investment as they rise with inflation.  My dad’s venture into real estate prompted my curiosity.  What attracted me to real estate is that as long as your property is being rented, someone else is paying your mortgage.  This sounded too good to be true.  In order to do some research, I read through two books:

Rental Houses for the Successful Small Investor by Suzanne P. Thomas

The Weekend Millionaire’s Secrets to Investing in Real Estate by Mike Summey and Roger Dawson

After reading just the titles, you can probably tell that the authors of these two books take two different approaches to real estate investing.  The keywords “Small Investor” and “Millionaire” help illustrate the different purposes for these investors.  Thomas is more interested in securing a retirement income that she can live off of, while Summey and Dawson have their scope on making money (and lots of it).  Both are acceptable approaches to Real Estate.

Small and Invested

Suzanne Thomas does a great job at illustrating how the average person can become a landlord.  She highlights her personal story in becoming a landlord of multiple rental properties.  She prefers single family homes (as do Summey and Dawson) because of the ease of maintenance for the owner – a person who rents a home is expected to do lawn care and provide major appliances.  Thomas’ goal is to have enough monthly income from her houses that she can retire on.  She believes managing her properties is not that much of a chore and prefers to save money by not hiring a management company for her rentals.  She also saves up about 20% for a down payment when purchasing a new property in order to provide for an easy positive cash flow.

Big and Detached

Summey and Dawson are real estate experts.  They buy lots of rental properties with the understanding that they will not personally manage them.  They buy houses at wholesale prices (from motivated sellers) and as a result, can afford to hire someone to take care of the day-to-day chores.  Summey and Dawson provide valuable information on both negotiating skills and creative financing – both of which I will probably employ in the future. 

Thus, from what the book suggests, it sounds like regular financing with a 20% down payment is not as common for them.  They highlight the thousands of dollars you can save by obtaining financing from the seller.  By offering the seller a higher price at a lower annual percentage rate (financed through the seller), you able to accomplish two things: keep your monthly payments down and provide the seller with their asking price, if not higher. 

Their plan also illustrates the valuable calculations one must do to ensure that you have a positive cash flow for each property, even at the time of the purchase.  They have created a system that allows anyone who can buy a rentable property at a wholesale price to make lots of money.

My Plans

After reading these two books, I am planning on getting into real estate by following Suzanne’s method more than the other.  I find Summey and Dawson’s Millionaire scheme to be enticing, but I think it will be very difficult to buy properties at wholesale prices (at least at the beginning). 

However, after getting settled with my first rental (which will probably be a multi-family home because I live in the northeast and these are quite popular), it is not beyond my scope to pursue other rentals based of the millionaire plan.  I also plan to try and save money by managing the property myself. 

If it becomes too much of a hassle, I will gladly pay the extra 8-10% for someone else to deal with complaints from tenants.  As Summey and Dawson point out, it is also much easier to purchase other rentals once you have equity in at least one other property. 

It is, however, important to point out that my end goal aligns more with Thomas than Summey and Dawson.  I hope to provide a reasonable retirement income through real estate.  I don’t intend on having hundreds of properties or accumulating that much wealth.

What is your goal for utilizing real estate as an investment?

Investing Money Retirement


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I am doing the exact same thing as the small investor. I have single family homes that have 20% down. I intend to hold them for income in retirement. I hope to buy more but have to get the kids through college first and want to shore up the balance sheet.

    • Sounds like a great plan CFM! I’ll be right there with you soon, but I think I’m going to try to do it with cash. It will be slow at first, but by not paying interest, I expect to succeed greatly in the end! 🙂

  2. CFM, it is good to hear! I think it sounds more manageable by starting small. It also doesn’t consume all of your life, but having some rental properties helps to diversify your investments. Derek, Good luck in your real estate endeavor. I am anxious to hear how that works.

  3. I live in a single family home that i bought in 2009. I should have it paid for in 4 years or so. The plan is to live in it about 2 years after its paid for and sock away cash to purchase our next home and rent the current one out. After that we will still make “payments” to a savings account/brokerage account that will fund the next rental purchase.

    Slow at first but it will snowball once i get passed paying off my current home.

    • Matt,

      It sounds like you are well on your way! That sounds like a great plan. Good luck!

  4. Great post! I’m really ready to get started investing in real estate but it will probably be at least 2 years before I will take the plunge. It will take me at least that long to pay off most of my debt and save 20% for the down payment.

    • FSYA, Thanks for the complement. I certainly understand the time that it takes to save up for the down payment. I am currently in graduate school, so it may be 5 years before I am able to save up the money for a down payment. That doesn’t stop me from planning though. 🙂

  5. I’m on the small investor path as well. I think that way is much safer and slower. Most real estate big shots do a lot of refinancing and keep buying more properties. It seems like a big house of card to me. ba da bam!

    • Retirebyforty, it is good to hear that you are taking the same path. It definitely does seem a bit uncertain to have too many rentals (especially in this market).

  6. I’m on track to do the small investor plan. We’ll be moving in 12 months, probably overseas. Our home will have to be a rental, or sit empty in the very worst circumstances. I believe we are on target to generate a positive cash flow.

    • Hunter, that sounds like a smart plan. Good luck renting out your home.

  7. I bought my first rental property almost a year ago. I plan to buy more as the years go buy and use the rental income in retirement. That’s the plan anyways.

    I’m very happy with my investment so far.

    • Ashley, thanks for the comment. It is good to hear other individuals taking the plunge and being happy with it.

  8. I think it’s a good idea to start small and learn the essentials through that experience before going big. 🙂 I think it helps minimize the investment risk 😛

    • WoF, thanks for the advice. I certainly agree that it takes time to learn the ropes.

  9. As someone who’s been a RE investor and currently have one property. RE can be great, but it can be a lot of work and hassle if not careful. Owning investment real estate properties is a business, not a completely passive investment.

    Remember the most important part is finding great tenants! Otherwise the property can suck you dry. Otherwise REITs might be a better option.

    At least in the NY/Long Island area there really aren’t any great deals to be found currently. The Rental to property ratio is way too high. Sometimes I wish I lived in the south.

    • Investor Junkie, I understand your frustration. There are better markets than others. Thanks for the great advice. I agree that good tenants are essential to establishing a good investment. A good friend of mine just made a trip to Ohio, where his parents were cleaning up their rental property after having to evict the renters. In just under two years, these renters wore out the carpet, left junk in the yard,and took all of the major appliances, including the furnace and water heater. The owners of the house were using a Realtor to rent out the property but the Realtor didn’t perform a background check nor did the lease indicate that major appliances belonged to the owner. To make a long story short, not only are they going through a huge hassle, but are out 5-10k because of a few mistakes. It is important to have all of your bases covered when renting property. With all of that said, I am still optimistic about establishing a passive form of income through rental property.

  10. Small investments like single family homes, duplexes and other multifamily property can easily turn in to a fantastic stream of income, and if you structure the financing correctly, you can expand it quickly.

    • In other words, you mean extend the loan terms to 30+ years so that the cashflow would work in your favor. I used to think this way, but now I think I’d rather pay off a property in full (in 2-3 years), and then move onto the next one, rather than have hundreds of thousands of dollars hanging over my head each day. Safe millions are better than risky maybe-millions.

  11. Yes, I do mean using the longer term financing. However, this is just to get you going, especially if you do not have much capital of your own.

    Once you start making some money, you can take a look at your inventory of properties, and see whether it makes sense to go risk another 30 year loan to acquire another property, or if paying down or off one or more of your existing properties is better.

    End the end, it’s all risk vs. return. You have to decide how much risk you can stand…

    • For me, I like keeping risk to a minumum. I can’t imagine having two different house loans at once!

  12. I would like to comment about the real estate business I do not have anything against real estate investing. But lets be clear this is a business just like if I own a used car dealer ship’ a health food store a convenient store any variety of businesses. Each type of business has its own little little quirks of sorts real estate is no different. To many real estate investors look upon real estate as an investment and that is why many of them fail to succeed in the real estate business’ Real estate is clearly a business thats how one should look upon real estate. A good example of this is commercial real estate. When ever I drive around I see many almost empty or completely empty stripe shopping stripes. I don’t mean big box stores that are empty. I talking about a small commercial buildings that might house ten or at most fifthteen small mom and pop businesses along a major thoroughfare. I have seen dozens and dozens of partially or completly vacant stripe shopping stripes and I don’t live in detroit. I live in the suburbs of chicago and this is not something recent. I have seen this five ten fifthteen years ago so what does that tell you about investing in commercial real estate. Their must be many problems with these type of properties.

Comments are closed for this article!

Related posts