NEW YORK (CNN/Money) - Growing up along the Front Range of eastern Colorado, Cody Kennedy got a good grounding in traditional ways: Respect your elders, eat your vegetables -- and always pay off your old purchases before you buy anything new.

His family of ranchers and cattle owners, "is, fiscally, very conservative," says the 31-year-old.

So when he and wife Summer bought their first house in 1999, he didn't expect it to be the start of a real estate business. He had bought the family home, nothing more.

True to form, Kennedy put down a substantial payment (more than half) of the $143,000 he paid for the three bedroom, two bath house in Fort Collins.

Most of it was a gift from the family feedlot business. The rest came from savings from Kennedy's own insurance and financial brokerage business.

His business produces "erratic earnings," he says, some months bringing in five figures and others, zilch. "Whenever I got a big check I would pay off some principal."

The late 1990s and early 2000s were good years, both personally (the couple had two baby girls, Kathryn, now 4, and Elizabeth, 2) and professionally.

So he was able to pay off the mortgage in three years.

In the meantime, though, the real estate business began to interest him. He read books on the subject, including "Rich Dad's Real Estate Riches," and picked up different methods of financing home purchases.

In March 2002, he bought a bigger house in Fort Collins -- paying $243,000 -- to live in, and rented out the first. After a year and a half, he sold the first one for about $31,000 in profits and plowed that into the new place.

Then, he visited his local Wells Fargo banker and told her, "I want to use my equity to purchase other properties." The broker set him up with a line of credit amounting to 100 percent of the value he had in his house.

The line of credit enabled Kennedy to act quickly when he found a bargain, and it carried a low interest-only rate of prime plus 0.15 percent. Wells Fargo only requires a payment of $500 if he closes the line of credit within three years.

The cash came in handy in October of 2003 when the Kennedys moved across the state to Summer's hometown of Grand Junction. They paid $183,000 cash for a four-bedroom house there, and rented out the Fort Collins home for $1,075 a month.

Cody then shifted into high gear. His brokerage business had slowed and he spent many weekend hours driving around looking at properties.

Last February, he found a nice brick single family in Centennial, Colo., near Denver, that he bought for $130,000. He did about $15,000 worth of work on it and had it reappraised for $230,000, which increased his line of credit to $207,000. He rented it for $1,095 a month.

In August, he bought a duplex, two side-by-side apartments in one building, for $137,000. One side was already rented for $575, and he had a tenant in the second, at $595, by the first of October.

The Kennedys lived in Grand Junction by then. Across the street, a house similar to theirs had fallen into disrepair. The owner had lost his job and the family had moved out. As the home slipped toward foreclosure, no one would pay its asking price of $180,000.

The house sat so long that Cody made a deal for it for just $133,000. He put another $12,000 into the fix-up and now rents it for $975 a month.

That brought the total number of properties the couple currently owns to five, including the family home. Rents produce more than $51,000 and payments to the bank offset that by only about $25,000. Even with taxes and maintenance, he still makes a profit.

Does he worry that he's stretched too thin?

No, for two main reasons. "All my properties cash flow pretty well," he says. "Even if interest rates go up another point this year, I'll still have profits."

Kennedy says he rents at slightly below market in order to have his pick of tenants, requires credit reports from applicants, and keeps the properties in excellent condition.

"My costs are low," he says. "I could carry all my rentals for a year and it wouldn't kill me." He says he will only buy a property that he judges a great value.

The markets these properties are in have not gone through severe price inflation. At last report, for example, Denver single-family home prices had risen at an annual rate of under 3 percent, and the average home sold for $250,000, considerably less than the sizzling hot markets in the Northeast and California.

So Cody is confident he can ride out any real estate storms and he's actively seeking more deals, and taking calculated risks.

It's all part of his transition from his conservative roots to wheeler-dealer.