Buy property early: by purchasing real estate while in college, Carl White has built a real estate portfolio with more than $300,000 in equity.

IN BETWEEN CONDUCTING CLASSES ON the fundamentals of engineering at Morgan State University, Carl White schools his students on the principles of real estate investing. The college professor says real estate is the cornerstone of wealth accumulation. "I know these students are going to earn good money," says White. "They are young and they'll be thinking about buying an expensive car or paying rent in an expensive neighborhood. I'm trying to drill into them not to waste their hard-earned money."

Indeed, White practices what he teaches. In addition to a 401(k) account valued at $450,000 and a stock portfolio worth $50,000, he owns three homes in Baltimore and surrounding areas. One is his current residence, which has a market value of $400,000. He deposited $60,000 toward a split-level five-bedroom home that appraised at $200,000. Since 1996, it has doubled in market value. White's son lives in a single-family home worth $135,000 that White owns. Another, purchased jointly by White and one of his students, who currently resides there, is valued at $105,000. He put down $5,000 to acquire it in early 2005. White has more than $300,000 in real estate equity in addition to 15 acres of land in Mississippi that he owns, which is worth $20,000.

The 50-year-old educator, who earned $120,000 last year, says while his career has brought him steady earnings, his commitment to Declaration of Financial Empowerment principle No. 1: to use homeownership to build wealth, has propelled his asset-building program.

White was just a sophomore at Howard University, where he obtained his bachelor's and master's degrees in engineering, when he purchased the apartment he was renting. His building became a co-op and renters were given first preference to own their units. The unit was valued at $100,000. "I asked my mother for $1,000 for the deposit and she gave me the money."

In addition to building equity, White was able to take advantage of the tax breaks that come with owning property. He later sold his unit and made $10,000 profit.

White's next real estate purchase taught him a valuable lesson: Find properties that an owner is desperate to sell. After moving to Ithaca, New York, in 1984 to pursue a doctorate at Cornell university, he decided to buy a three-bedroom cottage. The property appraised for $80,000, but White obtained it for $65,000 because the owner of the property was relocating to North Carolina to start a new job. "Whenever you relocate and you're sitting on a house at another location that's not occupied, you're paying for housing in two places," says White. "A lot of people in that situation are anxious to sell and will sell for below market value." He later sold the house in 1987 for $90,000, netting a $25,000 profit.

White later moved to Baltimore in 1988 when he took a teaching position at Morgan State. Shortly afterward, he structured another profitable real estate deal, this time buying two brownstone townhouses that were next door to each other. He paid $30,000 to form a partnership with the owner of the buildings. White agreed to complete the renovation of one of the buildings and find tenants for both in exchange for all rental profits from one building and a portion of the rental profits from the other. "Each building was worth $30,000 and the legal contract we signed said that I would manage the properties and guarantee the owners that I would pay $1,500 a month for 15 months. That way, they would recoup their money," he explains.

White entered into the partnership in 1989. He sold the buildings four years later for $175,000. Three years after that deal, White found a detached home in Baltimore with a market value of $95,000. Instead of buying the home and making a sizable down payment, he opted for a year-long rent-to-own program. "I paid $500 [per month] for rent plus $200 extra for a year," says White. "Then we took the extra funds that were built up over a year and used them for my closing costs." That option gave White the opportunity to save some of his real estate profits.

In 1996, he sought larger living quarters for his wife and three children. With each property purchase, White is realizing his dream. He says, "If I did not teach, I would [pursue] real estate all the way with the goal of having $1 million in equity by the time I'm 55."

PRINCIPLE 1

To use homeownership to build wealth

White shares three important tips for building wealth through real estate:

* Buy real estate as early in life as you possibly can. This way you can start building equity and assets early. White says many young people don't understand the concept of owning property that will appreciate in value.

* Know your options when Purchasing real estate and take real estate courses to learn more about the process of buying property. White explains that there were times when he bought real estate by negotiating with the owners to arrange a payment plan for purchasing the property over a period of time or he would purchase through a rent-to-own program. "What that did was help me to save and plan my money, rather than depositing a large down payment," he says.

* Develop a network of clients, In White's case. the students at Morgan State have been his clients. White is quick to point out that as a property owner you need to find good tenants and have a well-written contract that protects your position as a landlord.

Declaration of Financial Empowerment

From this day forward, I declare my vigilant and lifelong commitment to financial empowerment. I pledge the following:

1] To use homeownership to build wealth

2] To save and invest 10% to 15% of my after-tax income

3] To commit to a program of retirement planning and investing

4] To engage in sound budget, credit, and tax management practices

5] To measure my personal wealth by net worth, not income

6] To be proactive and knowledgeable about investing, money management, and consumer issues

7] To provide access to programs that will educate my children about business and finance

8] To support the creation and growth of profitable, competitive black-owned enterprises

9] To use a portion of my wealth to strengthen my community

10] To ensure that my wealth is passed on to future generations

PHOTOGRAPH BY JOHN WHITMAN