How Small Apartments Build Wealth Fast

Learn how forced appreciation and four income streams create predictable profits with every small apartment you own.

In the world of real estate investing, small apartments—those with five or more units—offer one of the most overlooked paths to wealth. As Lance Edwards explains, they allow for fast, predictable profit creation through something called forced appreciation.

This strategy begins with a simple formula:
Value = Net Operating Income (NOI) ÷ Market Cap Rate

By increasing NOI—either through higher revenue or reduced expenses—you directly increase the property’s value. For example, a $100 monthly rent increase per unit can boost your property’s value by $15,000 per door. And yes, that’s just from one rent bump. This increase is not theoretical. A commercial appraiser can confirm that new value within 30 days, making this strategy as instant as it is predictable.

But that’s just the beginning.

Small apartments generate wealth in four powerful ways:

1. Forced Appreciation
   As NOI grows, so does the property’s value—automatically.
   
2. Residual Cash Flow
   With third-party management in place, higher rents translate to steady, monthly income.
   
3. Mortgage Pay Down
   Each rent check helps pay down your loan, building equity. Over five years, that can amount to six or even seven figures.
   
4. Massive Tax Deductions
   Property ownership provides generous write-offs, reducing your taxable income and letting you keep more of your earnings.
   

Combined, these strategies deliver a minimum of $20,000 net per door over five years. That’s $20K in true wealth for every apartment you own—cash flow, equity, appreciation, and tax savings included.