The real estate market has been very good to Leon and Terri Keesee. Just in their 30s, the couple has amassed a level of wealth that many people never see in their lifetime. Their assets total $2.2 million with more than $292,000 in equity investments. There's the six-bedroom primary residence in Yorktown, Virginia, bought three years ago at $370,000 and now worth about $600,000. The couple has a second home and six other rental properties. They also own eight acres in Gloucester, Virginia. Leon contends that he ripped a page from his father's playbook. "Dad was into real estate. He laid the foundation." Leon inherited the home he grew up in and two rental properties when his father died in 1999. Those properties, bought decades ago for around $30,000, appreciated five times that amount. Leon was able to get a bridge loan on the first home (which he sold soon after) and used that money to build the house in which his family currently resides. He was also able to get home equity lines of credit based on the value of the two inherited rental properties (about 80% of $150,000 each), which were used to pay off the existing mortgages and to purchase his fourth and fifth homes. The Keesees continued to parlay the equity in their homes, putting 20% down payments on their next two rental properties. Says Leon, "We are using the equity in our homes to buy new properties and using the renters to pay off the loans and to pay down the mortgages." Outside of $877,000 in mortgages, the duo's only other debt is $1,600 on a credit card. Leon earns $91,500 as a pharmaceutical sales representative and $12,000 as a battalion staff officer in the Army Reserves. Terri earns $46,500 as a crisis counselor for a local school district. The couple has concerns. Leon, 36, wants to protect their real estate investments, while Terri, 34, wants to do more outside of the investments in her employer-sponsored plan. Then there's the matter of education for their children, 14-year-old Krystin and 4-year-old Christopher. Though the Keesees have $23,000 in a Virginia Prepaid Education plan set aside for Krystin, it will cover tuition only. There's $11,000 in a 529 plan earmarked for Christopher. The husband and wife team know there is still work to do. The Advice BLACK ENTERPRISE paired the Keesees with Danny Freeman, a financial adviser with Darda Wealth Management in Winston-Salem, North Carolina. Freeman is quick to point out that the couple is overexposed to real estate. "The Keesees are at risk for extended periods of low appreciation, or worse, price declines. If this happens, they may find that the long-term rate of return on their real estate portfolio is below an acceptable level needed to meet their long-term goals," he explains. Freeman adds that the couple's cash reserves are too low. "If several of their rental properties were vacant at one time, they would be forced to make mortgage payments and cover other related expenses until they could locate new tenants." Freeman recommends that the Keesees keep at least $45,000 available in cash savings. They have about $20,000 (outside of the children's savings accounts). They should put away $500 to $1,000 per month until they reach the $45,000 goal. About 50% should be invested in money market funds and 50% in short-term securities such as Treasury Bills or CDs. "This will allow them to boost their return without sacrificing liquidity," he adds. Freeman's other recommendations for the Keesees: Diversify real estate holdings. The Keesees' properties are all in Virginia. "You can't assume that there will always be someone who will pay you more than what you paid. Real estate is subject to the same forces of supply and demand as most other investments," warns Freeman. The Keesees should also see if any of their properties would be a good candidate for a Section 1031 Exchange, which allows you to "exchange" one type of real estate for another. "The gain on their residential rentals will be tax-deferred. Capital gains are not recognized until they actually sell the new property," adds Freeman. Reallocate portfolios. Freeman suggests the couple look into building a tax-free bond portfolio, including purchasing bonds from municipalities in Virginia. He recommends the Vanguard High-Yield Tax Exempt Fund (VWAHX). "This is a low-cost municipal bond fund, which currently has a yield of about 4.2%." Another high-yield bond fund the Keesees should consider is the BlackRock Debt Strategies Fund (DSU). "This fund is a taxable bond fund that currently sports a yield of about 8.9%," says Freeman. The Keesees currently have about 15% of their equity exposure in international stocks. They should look to increase this exposure to as much as 20%, as foreign markets will continue to exhibit higher rates of growth than the U.S. for several years to come, Freeman says. Cut back on employer stock. Of the nearly 63% of Leon's equities that are in the healthcare services sector in his employer plan, more than 60% of that is Pfizer. Freeman recommends Leon reallocate: 10% Pfizer stock, 30% T. Rowe Price Value fund, 15% Fidelity Mid-Cap Stock fund, 15% Fidelity Low-Priced Stock fund, 20% Fidelity Overseas fund (International), and 10% T. Rowe Price Fixed Income fund. Build up Terri's Roth IRA. She should contribute 3% of her pay, but no more than 6% since there's no employer match. "Where Terri can really make a difference in her retirement is through her Roth IRA. For 2006 and 2007, she can contribute up to $4,000 per year," says Freeman. Open 529 college savings plan for Ph.D. The Keesees should take the $2,000 contest winnings and start a 529 savings plan for Leon's doctoral degree. He has expressed a strong desire to teach on the college level. "He really feels like this will be a way for him to give back to the black community," says Freeman, who likes the CollegeAmerica 529 Savings Plan, which is sponsored by the Commonwealth of Virginia. Financial Snapshot: Keesee Family HOUSEHOLD INCOME Gross Income $150,000 ASSETS Â Primary residence $600,000 Savings and checking accounts 23,000 valign="middle">Money market account 1,100 529 plans 34,000 Roth IRAs 10,000 Terri's retirement plan 19,395 Leon's 401(k) 135,000 Mutual funds 125,200 Microsoft stock 2,500 2003 Toyota* 30,000 1997 Mercedes* 5,000 Land (Gloucester, VA) 35,000 Other properties $1,176,000 Total $2,196,195 LIABILITIES Primary mortgage $270,000 Mortgage on other homes 607,000 Credit card 1,600 Total $878,600 NET WORTH $1,317,595 *ACCORDING TO KELLEY BLUE BOOK.