NEW YORK (MONEY Magazine) - The appeal of real estate is simple: It's one area where regular people can get a significant amount of investment leverage.

If you have decent credit and $20,000 to put down, you shouldn't have much trouble getting a mortgage for $100,000. Invest that money wisely -- in a home whose value appreciates, or a rental property that produces net income -- and you can reap a big profit from a modest outlay. No wonder that almost a quarter of all home purchases are now done for investment purposes, according to the National Association of Realtors.

Fortunes have been made. Lisa Van Deusen arrived from Vietnam with her parents in 1978. The family was virtually penniless. Her mother worked as a seamstress, while her father worked on an assembly line building electronic components. "We lived on rice and soy sauce for a while," she says.

Van Deusen, now 31, started out as a real estate broker after college (education, remember?). Then she and her fiancé (now husband) Todd started buying and selling for themselves. Along the way, they've accumulated property worth $5 million, in which they have about 40 percent equity.

Their first deal in 2000 started as a home purchase. The couple scraped together $25,000 to put down on a $230,000 condominium in northern California. When Todd got a job in Santa Barbara, they sold the condo for about $400,000.

Van Deusen used the proceeds to wipe out her credit-card debt, pay for her wedding and buy a 1996 Lexus. That left her with $50,000 that she and her husband used to buy a condo in Santa Barbara. Within a year its value rose $125,000.

The couple then borrowed against their equity in the property to buy more. Now they own six single-family homes, a triplex in Arizona and at press time were closing on a 30-unit rental property in upstate New York. They're also looking for opportunities in Texas and Oklahoma.

"Basically I had $50,000, and I've been playing with the bank's money," she says.

The flip side of making a fortune, of course, is losing your shirt. Rising home values have made real estate today's "obvious" path to wealth. In 1999, tech stocks were this "obvious." No one wants to learn that lesson twice.

Rising interest rates can knock a big chunk off the value of any property you buy today, especially in an overheated market. If that happens, can you afford to sit on that investment for five or 10 years until the real estate market comes back?

Van Deusen says that for the last few years she and her husband just bought whenever and whatever they could. But about a year ago, after they sat down with a financial planner and looked at what they had, they began to diversify by property type and location, as well as by asset class, purchasing those investments of yesteryear -- stocks and bonds -- for the first time.

Next in the road to riches: Being your own boss

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