It is a misnomer that wealthy and well educated professionals are properly set up for retirement. In reality most of these professionals are the last to start planning their retirement plan. The reason is that these professionals begin their careers with large amounts of debts due to student loans. Student loans are often unavoidable to achieve advance degrees needed to have a successful career.

In addition to student loans come other unavoidable monthly expenses such as mortgage payments, private school tuitions, car payments, insurances, and so on. After each monthly expense there is not much left to invest into retirement. You as a professional probably feel confident that you can make up the difference once debts are paid off and your kids finish college.

Let me pose a hypothetical situation:

You are a 50 year old professional with a yearly salary of about $300,000. You so far only have $10,000 in an IRA saved for retirement. You plan to retire by the time that you are 65 years old; however you do not want to give up your lifestyle when you retire. Using this scenario you would have to save and invest over $300,000 every year in order to meet your retirement goal and be able to maintain your lifestyle after retirement. So how would you ever be able to achieve this? Fortunately there is a solid plan that would allow you to retire in the same amount of time and allow you to maintain your lifestyle, and that solid plan is to invest in multi-family properties.

Here’s the plan:

You purchase an apartment complex that has about 30 units. The asking price is $600,000 which you could realistically get for around $540,000. If you put down $108,000 and took out a 15 year fully amortizing mortgage at $432,000. With 6% interest your annual payments would be $43,745. However, your net operating income would be $60,000 annually so you would have a profit of $16,255 per year. You in turn invest that into paying down the mortgage. With the above example you would have the entire mortgage paid within 10 years and a steady income of $60,000 that will last forever.

Now imagine that you repeated the same scenario once per year for five years consecutively. By using the method above and putting all available income into debt reduction, you could have all five properties paid off in approximately 11.5 years. This will leave you with a steady income of $300,000 annually that will last forever.