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The theory works. Many novice investors have turned $20 000 to $50 000 into a $1 000 000 property portfolio. In today's market, a portfolio of this size rarely requires more than six properties, an easily manageable investment portfolio by any standards. The question should not be 'can I,' but 'Can I build a profitable portfolio?'

Most new investors forget to ask this question until it is too late.

The first step is to success is by defining the term profitable. At the end of the year, the investment portfolio should yield excess income. The expenses are paid, including taxes, and vacancies should be calculated as a loss. Then, the profit can be measured, a number not necessarily equal to the 'cash on hand.'

The profit should also exclude money saved for renovations, improvements, taxes, and future vacancies. What is left is profit.

The objective of a $1m portfolio is not always to generate enough money to live on. The two most common reasons for building this type of property portfolio is to cover a pension and retirement fund, or to generate wealth.

It is highly unlikely that six properties will generate enough income to provide a comfortable living, but if managed wisely, it will grow into 'real' wealth within time.

Many Do-It-Yourself investors can create a $1m portfolio with careful planning. A little training, and some help, will enable them to create a profitable one.

One of the biggest mistakes is to pay a portfolio building company '20,000 to build a portfolio. This is a quick way to burn money.

The basic formula can be used in most countries, and in most cities.

The first step is to divide the $50 000 into down payments. The investor must put at least 15% down on each property. The number of properties purchase at this point depends on the initial investment.

The best strategy is to buy one or two properties. Refinance them to draw the 15% equity from the down payment, as well as any difference between what the investor paid, and the house's real value.

Even if the housing market doesn't increase, which is unlikely, there is always equity available in the home.

Only aggressive investors who do not fear the risk factor should reinvest in new properties at this point. Rent the properties, sort any problems associated with the properties out, and then let your properties accumulate a bit more equity.

An aggressive investor will turn the equity into cash and use it. The objective is to look for a larger discount on the next two homes. When done right, the investor will have a $1m property portfolio, with $50 000 in the bank.

The money in the bank is vital. It will protect the investment against rental defaults and vacancies. Don't worry about a fluctuating housing market. It constantly moves up and down. House prices have been high before, and they will again.

Of course, this is only a brief synopsis of a real property investment program. It would be impossible to teach investors how to protect themselves from all risks and pitfalls in a single article. However, there are networks and programs that will help investors how to build wealth while avoiding the hazards.