You don’t need to be rich or even have perfect credit to take advantage of the fantastic market for rental real estate today. If you are willing to invest about ten hours of work this month, I’ll show you how you can add as much as $80,000 or more into your retirement account.

For the purpose of this blueprint, I’m going to use the example of a $100,000 three-bedroom, two-bath house.

First, find two or three neighborhoods near you that have houses for sale in your price range (for the purposes of this example, assume $100,000). Spend an hour driving through the neighborhoods. Talk to people on the streets. Ask them about the community, safety, schools, and the same questions you’d ask if you were going to move in. (Invested time: three hours.)

Second, call up a few local brokers who are listed on these properties. Tell them your plan: buy multiple houses at this price range and rent them out. Ask the brokers about the market for rentals, the prices you can expect, the occupancy rate, the quality of renters. (Invested time: one hour.)

Based on your research, select the neighborhood that has the best overall values (low cost, high rental income, quality of renters, etc.). This is going to be your financial playground. Select the broker you like best, and spend several hours looking for houses for sale that meet your criteria. (Invested time: three hours.)

Next, call up several local banks and ask them if they provide loans for real estate investors. Tell them what you intend to do, and ask them what qualifications you would need to get an investor mortgage. Determine which of the banks you talk to are most interested in your business. (Invested time: two hours.)

Since you might not have good enough credit to get a loan on your own, you might need to partner with someone who does. Start your search by calling friends and family members who have good credit.

Tell them what you are doing, and ask them if they’d like to become a partner in income-producing real estate. Be prepared to show them how much cash they can expect to earn every month and how many tens of thousands of dollars they will make when the property increases in value.

If they sound interested, propose the deal: You will put in the sweat equity in buying the house, managing the financing and repairs, and securing the first tenants. They will provide their good credit. Each of you will have equity, and each of you will enjoy the income and capital appreciation. (Invested time: approximately one hour.)

Determining the percentage of equity you each get depends on how you value the contributions made. In other words, it is negotiable. But to frame your discussions, here’s how I look at it: The good credit that your partner contributes is worth 25% of the equity.

All the work you do in terms of finding the house, locating the financing, managing the repairs is worth 25%. That makes you 50/50 partners so long as you each contribute half of the down payment.

If the down payment is $20,000 (20% of $100,000) and you pay it all, you should get 75% of the equity. If you each pay half of the down payment, you should be equal partners. If you don’t have any money and your partner puts up the down payment, he should get 75% of the equity.

Why would this person lend you money? It’s not because you’re a nice person and they want to give you a hand, although that may be part of their motivation. The important, business reason is that you are giving them a chance to profit from an asset of theirs (their credit rating) that is currently doing nothing for them.

Did you get that? If not, read it again. They should be thrilled to make this deal because you are giving them 25% of an income-producing business in exchange for their signature. (Of course, it’s more than their signature. They are guaranteeing the mortgage. But with opportunities like these, the risk is almost very low.)

After you’ve completed your first deal and the money is flowing, look for another property. Find a second, similar property in your financial playground and offer the same deal to your partner. Chances are, he will jump on it because he’s been getting those monthly checks and thinking about the big payoff when you sell the property at some distant point in the future.

If your partner can’t do it, find another friend or family member who will. Remember, the deal you are offering is more attractive than the first one since you are now a proven performer! You may very well find that you have multiple friends and family members eager to work with you.

Don’t get greedy when this happens and start buying properties that don’t meet your strict financial criteria (like ample cash flow and a dollar-per-square-foot price that is competitive for the area). A potential investor won’t disappear if you explain your conservative investing philosophy and put him on a waiting list. His desire to partner with you will just get stronger.

At some point, as your real estate empire grows, you may seek out an angel investor. “Angel investor” is a term usually applied to other sorts of financial transactions, but the idea is the same.

It’s someone with lots of money but not enough time to research and manage every investment he owns. Most of the wealthy guys I know are looking to invest in real estate right now. The problem we face is that we don’t have time to find the deals.

That’s where you come in. As a proven performer, you offer the angel investor a great deal of value. You come with an understanding of the market and the process of buying, renovating, financing, and managing properties. And you also come with a good deal in hand. That is worth a great deal to a wealthy person with lots of money but little time. Trust me.

You can find an angel investor in your community by asking around or even placing small ads in local newspapers. (I know three people who have done this in my community in the past two years.)

The deal you will make with your angel investor is pretty much the same deal you made with your prior partners. You may find that they want more than 25% for providing their credit and their guarantee. (They know the value of this.)

Depending on the size of the deal (several houses on the same block, or perhaps an apartment building), you may agree to give them more. But I don’t think you should agree to anything more than 35% for being the signer on the note.

By the way, there is a kicker in this strategy that I haven’t mentioned. After locating the first tenant, you can charge your business for managing the property. (You should form a separate business for each acquisition.) You can fairly charge between 6% and 10% of the collected rents for each of these transactions. That could be an extra $1000-$2000 a year in income for every small property you manage.

All this may seem a little daunting to you if you’ve never bought investment real estate before. But if you add up the hours I’ve indicated above, you can see that you shouldn’t be spending more than ten hours to launch every deal.

(These numbers are best guesses, based on my experience. Being a first-timer, it may take you twice as long. But even it it takes you four times as long, it’s still a ridiculously small investment of time for such a big financial benefit.)

Now let’s look at how remunerative those ten hours are going to be for you on a long-term basis. Let’s assume that your plan is to own your first property for fifteen years and then sell it. You could reasonably make $20,000 (maybe more) in management fees over that time, but we won’t count that because that’s really just income you are working for.

Let’s look only at your share of the property appreciation. Assuming that it appreciates at an average of 6% a year over that time period, the $100,000 house will then be worth $240,000. At the same time, let’s suppose the $80,000 mortgage you originally put on the property was at 6%.

In that case, after fifteen years, it’s now down to about $57,000.o you also picked up $23,000 in amortization (the reduction of your loan balance). That means the total gain for your partnership is $163,000. Your 50% share comes to $81,500.

Not bad for ten (to forty) hours of work.

Last year, my brother walked away from a $300,000-a-year job to devote himself full-time to cash-flow real estate investments. He grew his holdings from thirty-two units to 101 units in just over a year. His original portfolio was of houses, duplexes, triplexes, and quadplexes.

Now, he is buying 20-50-unit apartment buildings at a time.is current cash flow from these investments is more than $50,000. At the rate he’s going, he’ll have 200 units by the end of next year.

His five-year goal is 1,000 units, and I would be surprised if he doesn’t achieve it. In five years, his passive income could exceed half a million dollars a year, and he could have many millions more in equity.

In case you’re thinking, “This is not for me,” I want to say this: there is nothing about this kind of real estate investing that is difficult. You don’t need to take any classes to understand it. I learned the business entirely on my own, just using common sense. The main thing is to do your first deal. Invest those ten hours and see what happens.

Once you do your first deal, I won’t have to give you any further motivation. You will become addicted to it. (Making serious money is addictive.) After the first deal, you’ll be eager to do a second one. And after the second one, you’ll become a monster at this very lucrative and very safe way of building wealth.

Discover how to build wealth using this simple system

[Ed Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]

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Mark Morgan Ford

Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Wealth Builders Club. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.