When Stephan Jackson, a product manager for Hewlett-Packard in Newark, California, lost his job in May 2002, he was faced with making some major life changes. Jackson, 35, had pulled down a $98,000 salary for two years before his unit was shut down after HP's merger with Compaq Computer Corp. A month after his layoff, the Charlotte, North Carolina, native and his wife, Kimberly, 34, moved to Durham, North Carolina, Kimberly's hometown. They sold their 1,200-square-foot condo for $321,000 and bought a 3,200-square-foot, single-family home for $298,000. It cost less to live in Durham, and they would have family support when their first child, Zora, arrived in August. As luck would have it, the Jacksons's return to North Carolina was well-timed. The area around Research Triangle Park -- a research development located between Raleigh, Durham, and Chapel Hill -- was one of the nation's top places to live, work, and do business. Although he might have sought opportunities in RTP, his layoff made Jackson realize that job security was no longer guaranteed. His realtor in California encouraged him to explore real estate investments as an option to safeguard his family's future, and he agreed. "When we moved here, because of the rate of growth for the Triangle area, we thought it a prime opportunity to get more serious about investing in real estate," says Jackson. Jackson immediately began networking with mortgage brokers, realtors, and real estate investors. He also started looking for investment properties in the Triangle. Since he had an excellent credit rating, a mortgage broker advised him to pursue "no-doc" loans, which carry higher-than-average interest rates but don't require employment or income documentation. By December 2002, the Jacksons had purchased a single-family home for $55,000 near North Carolina Central University in Durham, and followed that with the purchase of another single-family home near downtown Durham for $77,000 in March 2003. Jackson used his savings and credit cards to cover closing costs and repairs to the buildings. By using the "no-doc" strategy, he was able to put 5% down on the properties and secure 7.3% and 8.5% adjustable rate mortgages, respectively. Both properties were refinanced in December 2004 for an ARM of 6.4%. The Jacksons rent out the first property for $700 a month, netting approximately a $200 profit. The second property breaks even, renting at $625 per month. While the yield from the properties is hardly enough to replace his salary, Jackson is taking a long-term view on acquiring real estate."There are other factors, like an increase in equity for the properties as long as we have them rented, and some additional relief from taxes each year," he says. "Monthly, we may not be gaining what we need, but I think it's meeting our needs for overall net worth, now and long term." With a new focus on building their net worth over the long term through real estate investing, the Jacksons hope to capitalize on Declaration of Financial Empowerment Principle No. 1: to use homeownership to build wealth. Because they owned their California condo, the Jacksons were able to sell it and buy a home that gave them almost three times as much space in a fast-growing area that will help their investment appreciate in value. Their purchase of other properties in the same area should also give them appreciation gains that will pay dividends in the future. Over the next few years, the Jacksons plan to either refinance their properties or sell them outright. The couple reached out to Durham financial advisers Fulbright & Fulbright to help them stay on track with their other financial goals, as well as meet the costs of maintaining their properties. Kimberly made about $170,000 in 2004 working as a physician for the Wake Medical Center in Raleigh. Jackson earned about $80,000 in commissions working as a realtor for Century 21 last year, and he hopes to obtain his broker's license this spring. Once Jackson gets his broker's license, the couple will have the opportunity to expand. His long-range goal is to leverage the equity of their investment properties into bigger ventures, including partnering with experienced real estate investors on new construction projects and commercial buildings. Jackson also hopes to open his own brokerage firm, where his earning potential can grow faster by having others work for him. While he knows he has a long way to go, this is Jackson's advice to anyone looking at real estate as a long-term investment: Be patient. "Learn as much about the market as you can [before you buy]," advises Jackson. He didn't realize new construction projects in North Carolina would compete with his properties for potential tenants until after he bought them. As a result, he has had to keep his rental prices low. Borrow money cheaply. Jackson says that if you can afford it, a home equity line of credit can be a good resource to finance properties rather than a high interest rate loan. "I financed the first two properties the way I did because I didn't have the capital or the experience," he says. Build a success team. It's important to find a good realtor, home inspector, and reliable contractors to help you select and rehabilitate your investment properties. Jackson says you can increase your success rate by developing contacts with people in city government who can help you understand economic development in your market, and fostering relationships with mortgage brokers and bank loan officers who can help you with financing. Also, having other experienced investors on your projects can broaden your knowledge of real estate faster. (For more information, see "Choosing the Right Investment Properties," February 2005.)