At the end of 2014, I received an email from someone who had stumbled across this website. He asked if we could meet because he was thinking of buying his first rental property. We ended up meeting for coffee at Panera and I was really impressed by him.

He was in his 30s and it was evident he was living below his means because he had saved up enough outside of his retirement accounts to be able to purchase a home for cash.

This is extremely impressive for his age. I have no doubt that he is going to become another “Millionaire Next Door.”

We blocked an afternoon and started walking through foreclosures together. One of the homes we toured is pictured in this article. This home was listed for sale for $69,900. It was a 4 bedroom colonial in Eastlake. The home had central air conditioning, a two car garage, new carpeting and was in move-in condition.

He ended up buying this home for $59,900 and on the week of closing he signed a new 2 year lease with a great family. The monthly rent he will collect on this home is $1,095.  The monthly property taxes are $242 and the homeowners insurance is estimated at $50 per month. If we budget another $100 per month for maintenance and repairs, his net income per month will be around $700.

Imagine what this one investment will do for his future?

Each year, he will collect $8,400 of income and will enjoy a 14% annual return on investment. With this one move, he has given himself an income raise for life.

The family living in his home will go to work each week to send him a monthly rent check. All he has to do is deposit the check and budget for taxes, insurance and maintenance expenses. If the tenant calls with a maintenance request, he simply will pick up the phone and call someone to take care of it for him. He doesn’t have to fix a toilet (unless he wants to) because he has budgeted for these expenses.

This client now has a new pipeline setup that will pump money into his bank account each month for the rest of his life.

The average person doesn’t think like he does. If the average person wanted more money, they would go searching for a second job. They’ll work evenings and weekends in order to increase their monthly income. To make an extra $8,400 annually, they’ll have to work 336 hours at $25 an hour. If they worked an extra 10 hours a week, they would have to work 34 weeks in order to make the same $8,400 of extra income.

Instead he lived well below his means and saved every penny he could. He used this savings to buy the income from a second job without having to get a second job.

What do you think he is going to do with this extra income?

He never told me, but I know he is going to save it and buy another property for cash in the near future. How do I know this? Because of how he thinks. He thinks about creating new pipelines.