In January of 2015, a story was released about an 87-year-old woman nicknamed “Mama Lee” highlighting the amazing life she lived. You probably won’t believe it, but she’s a permanent resident on a luxury cruise ship!

The headline for the article reads:

“This 86-year-old woman just lives on a luxury cruise ship, because she’s figured it all out.”

To quote from the story:

“My husband introduced me to cruising. Mason was a banker and real estate appraiser and taught me to love cruising. During our 50-year marriage we did 89 cruises. I’ve done nearly a hundred more and 15 world cruises.”

She travels the world without owning anything. She doesn’t own a home. She doesn’t own a car. This means she doesn’t have any mortgage payments, car payments, utilities, or property taxes. This also means she doesn’t have any car or homeowner insurance expenses.

And last but not least, she doesn’t have to worry about, or pay for, any maintenance or repair expenses. She doesn’t have to worry about her central air conditioning dying on the hottest day of the year!

Think about it… no yard work. No grass to mow. No watering. No fertilizing. No bushes to trim. No leaves to rake. No snow to shovel.

She doesn’t have to drive anywhere. She’s never stuck in traffic. She dances every day. She’s constantly meeting new people. There’s always a party within walking distance!

It gets even better…

She never has to go grocery shopping. She doesn’t have to cook. All of
her meals are provided for her!

She said her family visits as often as they can. They simply take a cruise on the same ship! She doesn’t have to clean the house before they arrive. She doesn’t have to prepare big meals for them. She doesn’t even have to provide any entertainment for them when they visit!

It’s all done for her!

She even has her own business card, which reads:

Mama Lee
Dancing, Cruising, Enjoying Life

Here’s a video from CBS This Morning News highlighting her story:

She really does have it figured out, doesn’t she? Now, you may not want to live on a luxury cruise ship like Mama Lee, but her story definitely makes you think. She lives her dream life.

You know what?

We can use rental real estate to create our dream lives, too! Below I’ve detailed a plan anyone could use to do what Mama Lee does.

The good news is it doesn’t have to be anything crazy or complicated. It’s not a “get rich quick” plan and it’s guaranteed to work, IF you have the discipline to follow through with it for the next 10 years.

This plan is designed around using real estate to provide your retirement income.

Why real estate you might wonder?

Because real estate offers you the ability to have other people pay for your retirement and your dream lifestyle. No other retirement plan offers this same opportunity.

The guaranteed 10-home retirement plan is outlined as follows:

  1. Buy one rental property each year for the next ten
  2. Use a 15-year mortgage for each purchase.
  3. Keep these homes rented and have the tenants pay down
    your mortgages for you.

With the 15-year mortgages, your tenants will be paying off your mortgages very quickly allowing you to retire early.

To see how this plan will work, let’s use an example of buying one home each year for 10 years. Since real estate values differ by area, we’re going to use a hypothetical starting mortgage balance of $150,000 for each home and we’re going to use a 15-year mortgage for each home.

Fast-forward 15 years and here’s how your hypothetical portfolio of homes will look:

In just 15 years, your tenants will have paid off $954,400 of your mortgages.

This is why real estate is so powerful.

What other retirement plan creates an opportunity where you can have someone else add $954,400 to your future retirement?

If you invest in a 401k plan for the next 15-years, will your employer contribute an extra $954,400 to your account?

For you to have an extra $954,400 in your 401k plan in 15-years, you would have to invest an extra $3,050 a month out of your paychecks with an average annual return of 7% each year.

Here’s the calculation:

Plus, this $954,400 gain from the tenants paying down your mortgages comes regardless of the market value of any of the homes. You might notice, in this hypothetical example, that the value of each home at the end of 15-years was the exact same as the original mortgage balance. Zero appreciation of home values has been considered.

More than likely, most of these homes will have appreciated in value throughout the 15 years. After year 15, you’ll have several fun options to consider:

#1 – You can keep all of the homes for the rest of your life.

The first home you purchased will already be paid off. You’ll obviously be paying off another home each year going forward

Year 16 – 2 Homes Paid Off
Year 17 – 3 Homes Paid Off
Year 18 – 4 Homes Paid Off

Your actual spendable income increases each year, as another home is paid off. You can start spending this extra monthly income as you wish! Maybe, start by taking a luxury cruise! 🙂

Or you can use this extra income to as an additional prepayment on a different home using the “debt snowball strategy” to eliminate all of your mortgages within just a few years.

#2 – You can sell 3 or 4 of the homes and use the proceeds to pay off the outstanding mortgage balances on your remaining homes providing you with 6 or 7 free-and-clear homes.

Yes, you could have 6 or 7 free and clear homes in year 16. You can use this income to “retire,” as you’ll have no monthly mortgage payments!

Look at the 15-year schedule and you’ll see the following:

  • You can sell the home you purchased in year ten and use the $47,200 of equity to completely pay off the $39,000 outstanding mortgage from the home purchased in year four.
  • You can sell the home you purchased in year nine and use the $56,400 of equity to completely pay off the $51,000 outstanding mortgage from the home purchased in year five.
  • You can sell the home purchased in year eight and use the $66,300 of equity to completely pay off the $62,500 outstanding mortgage from the home purchased in year six.
  • You can sell the home purchased in year seven and use the $76,500 in equity to pay off the outstanding mortgages on homes two and three.

Here’s how this would look in year 16 from the previous schedule:

By selling the homes purchased in years 7, 8, 9, and 10, you can completely pay off the homes purchased in years 2, 3, 4, 5 and 6.

You’ll have 6 free-and-clear rental homes. These homes will provide income to you for the rest of your life.

#3 – If you do have retirement savings in a 401 plan, or another retirement account, you might consider withdrawing enough savings to pay off any outstanding mortgage balances.

You’ll be using your existing retirement savings to buy more monthly income. Your return on investment would be guaranteed and you wouldn’t have to worry about the next big stock market crash destroying your retirement!

The best part about the 10-home real estate plan is that you’ll have several great options to consider.

All you have to do to get started is to buy ONE rental property this year.

That’s it.

Well, hopefully this special report has given you something to think about. Mama Lee’s story may make you re-think how you really want to live during your retirement years.

You could hire a property management company and live on a cruise like Mama Lee while your tenants provide your monthly income. Or if you don’t want to live on a cruise ship, you can rent an RV and travel around staying wherever you want. It really doesn’t matter what you want to do, because this plan is designed to help you get there!

The 10-home real estate plan may also make you think about how you want to save for retirement. Do you want to work for 30 or 40 years saving in your 401k plan, or do you want to have tenants contribute an extra $954,400 to your retirement in just 15 years?

All you have to do is buy one home a year. Once you have your first home, your tenant starts paying off your mortgage for you while you’re busy enjoying life. You’re using the passing of time to your advantage by leveraging your tenant’s monthly rent to make you richer with each passing month.

P.S. In my area here in Ohio, we can buy nice single-family homes for around 80. These lower prices ranges obviously make this plan a little easier to implement. If you’re in a higher priced area, you may be able to achieve your financial goals with fewer homes.

P.P.S. Please note that in my 10 home investment plan, I haven’t factored in any tax ramifications which you would incur if you sold any of your investment properties. Any home sale would, more than likely, trigger a tax gain which would reduce your proceeds accordingly. Please discuss this plan with your attorney and tax professionals.

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