In 2016 I wrote a book How to Acquire a Multi-Million Dollar Real Estate Portfolio with just $3,000 based on a presentation I gave of the same name. In that book I walked folks through how to acquire a portfolio of rental properties using the Nomad real estate investing strategy with lease-options. The book and presentation came about when I taught a class on how to come up with down payments to do the Nomad investing strategy.
At the time I discovered how to do the entire model with a mere $3,000 I had only the original Nomad Calculator Classic for modeling the Nomad strategy. The Nomad Calculator Classic allowed me to model buying essentially the same property every year. I added additional functionality for using lease-options to write the presentation. The $3,000 Nomad model required that you move into 11 different properties as a Nomad over 11 years.
Nomads loved the model, but some prospective Nomads balked at moving 11 times. I’ve eaten at the same restaurant 6 days a week for going on 18 years and lived in my current home with my wife, Tammy, and my sons for 15 years. I am reluctant to change as well so I get it.
That’s why How to Acquire a Multi-Million Dollar Investment Portfolio While Earning Just $5,000 Per Month is different.
For How to Acquire a Multi-Million Dollar Investment Portfolio While Earning Just $5,000 Per Month (and other more nuanced modeling of Nomad and related investing strategies) I invested, and continue to invest, heavily in the new Nomad Calculator 3.
Nomad Calculator 3 allows me to do modeling on investing strategies that was previously impossible. In How to Acquire a Multi-Million Dollar Investment Portfolio While Earning Just $5,000 Per Month you’ll see a small fraction of what the new Nomad Calculator 3 can do, and I am adding new superpowers to it as I write this. You will see these new features as I release new blog posts on the official Nomad website on LearnToBeRich.com, presentations, podcasts and, ultimately, new books.
How to Acquire a Multi-Million Dollar Investment Portfolio While Earning Just $5,000 Per Month is a book that, as its name suggests, is about how to acquire a multi-million dollar investment portfolio while making $5,000 per month.
I will play Virgil, your guide throughout our journey together, and walk you through several different means of achieving the same end. I will also share strategies that don’t quite hit our target of a multi-million dollar investment portfolio. I will include those for two reasons. First, to share with you some of the more common strategies for investing in real estate and the results they yield. And secondly, to be able to compare the results of those strategies to other strategies that do reach our stated target goal of a multi-million dollar investment portfolio.
Throughout this narrative you may hear me refer to a particular combination of accounts, houses, and rules as a strategy or, more frequently, as a scenario. Using the Nomad Calculator 3 we will model various scenarios to see how things could play out for you if you implement specific combinations of accounts, houses, and rules.
Here are the scenarios I will be covering, one per chapter with a comparative summary of all of them as a conclusion:
- Renter saves $160 per month but refuses to invest in either stocks or real estate. This is our baseline scenario.
- Renter saves $160 per month and invests that in stocks that earn them 8% per year. They do not invest in any real estate. For all the scenarios, I assume that the stock market earns 8% per year.
- Homeowner buys a home with 0% down payment and invests their savings in stocks. The only real estate they own is their own home.
- Homeowner buys a home with 1% down payment and invests their savings in stocks. Again, no other real estate. What impact does buying with 1% down payment have versus buying with nothing down?
- Homeowner buys a home with 0% down payment and invests their savings in stocks until they have enough to buy a single rental property with 20% down payment. How does a single rental property perform when combined with stocks?
- Homeowner buys a home with 1% down payment and invests their savings in stocks until they have enough to buy a single rental property with 20% down payment. Does a nothing down loan have a significant difference than using a 1% down payment loan program?
- Nomad buys a home with 0% down payment then Nomads into a 3% down payment property and stops buying real estate. They invest their savings in the stock market. How does a Nomad who only buys two properties do?
- Nomad buys a home with 1% down payment then Nomads into a 3% down payment property and invests in stocks. Does 0% versus 1% down payment on the first Nomad property make any difference?
- Homeowner buys a home with 0% down payment then buys as many 20% down payment rentals as they can save for. Invest in stocks while saving for down payments.
- Homeowner buys a home with 1% down payment then buys as many 20% down payment rentals as they can save for. How big of a difference does 0% down payment versus 1% down payment make here?
- Full Nomad starting with 0% down payment, then two at 3% down payment, then seven at 5% down payment while investing in stocks.
- Full Nomad starting with 1% down payment, then two at 3% down payment, then seven at 5% down payment while investing in stocks. Does 0% beat out 1% or vice versa?
- And finally, full 10 property Nomad starting with 1% down payment then 20% down payment rentals.
In each scenario above, you are earning $5,000 per month at the start. You have monthly expenses that leave you with $160 per month that is accumulating as savings. Each scenario assumes you do something different with the $160 and, to paraphrase Robert Frost, that makes all the difference.
We do assume that your $5,000 per month increases each month with inflation. So do your expenses. I assume inflation is 3% per year. I’ll also share with you what the results are in what I call raw dollars, non-inflation adjusted dollars, as well as inflation adjusted dollars. Inflation adjusted dollars reflect what money in the future would feel like in today’s dollars. For example, $10 million dollars 40 years from now is not the same as $10 million dollars today. It might be more like $3 million dollars. Nomad Calculator 3 does the math both ways for us, so I’ll share that with you when appropriate.
Accuracy of My Maths and What the Attorneys Want Me To Tell You
1 + 1 = 2. See, I can do basic math. And, every effort has been made to make sure the math for the Nomad Calculator 3 is correct and accurate. But, I am not perfect (so put down the stones) and mistakes could be made. If you happen to be one of those folks that like to check other people’s math I have two things to say to you. First, thank you; as someone who doesn’t proofread anything I write, I sincerely appreciate folks like you that do go back and check stuff I do. And second, if you would… very soft and gentle-like, tell me the math error I have… I am happy to go fix the code for the Nomad Calculator 3 so that we all can benefit from the most accurate and correct models.
With that being said: please do your own math and due diligence before investing real estate money based on anything I say here. And, the lawyers want me to remind you that past performance is not a guarantee of future results and all investment decisions should be your own and I am not giving you legal or accounting advice or advising you to buy specific investments, etc. In other words… don’t hold me responsible or blame me for anything… I am just sharing my thoughts with you for entertainment purposes only.
- Renter Saves $160/mo with No Stocks or Real Estate
- Renter Saves $160/mo in Stocks but No Real Estate
- Nothing Down Homeowner Saves $160/mo in Stocks but No Rental Real Estate
- 1% Down Homeowner Saves $160/mo in Stocks but No Rental Real Estate
- 0% Down Homeowner Saves $160/mo in Stocks and a Single 20% Down Payment Rental