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Ricardo Ulivi, 57

Started investing: 1988.
Focus: Leveraged real estate deals.
What stands out: Built wealth on a modest income and with virtually none of his own equity.
His advice: Save, save, save. Take prudent risks.

Here's a riddle: Ricardo Ulivi has never earned a salary of more than $90,000 a year, calls himself lazy, spends only 1% to 2% of his time on investing and has used virtually none of his own capital. Yet his net worth tops $2.8 million -- excluding the value of his house. How did he do it?

Answer: Shrewd investing in southern California real estate using other people's money. Today, he's a landlord in Orange County, and his portfolio of houses, apartments and small-business offices generates $184,000 a year. Says Ulivi: "Real estate is the lazy man's way to make money."

But give Ulivi his due. A professor of finance at Cal State Dominguez Hills, he has a head for numbers. He's also a keen observer. Ulivi runs a small financial-planning practice that doesn't generate much income but teaches him valuable lessons. "Everybody talks about stocks and bonds," he says. "But when I looked at my clients who had made money, they were all in real estate."

But how do you buy investment properties when you have five mouths at home (those of wife Lily and four kids) to feed on a professor's salary, which isn't enough to inspire a bank lending officer? Well, it helps if your residence keeps appreciating. "My house has always been my savior," says Ulivi, who has borrowed five times on the surging equity in his Orange County abode. He bought the house for $250,000 in 1985, and it's now worth $1.4 million.

In 1988, for example, he borrowed $90,000 through a home-equity loan and received $245,000 in financing from the seller of two small houses he bought in the old town of Orange. He knew the president of a local bank, which extended him a construction loan of $250,000 to convert the houses into professional offices.

The trick, of course, is to generate enough rental income to cover the loans. By the late 1990s, Ulivi was making money on all his properties. Then, when interest rates collapsed after 9/11, he refinanced his loans for about 5%, and the cash flow grew even stronger.

Ulivi is also a patient, prudent man. He crunched the numbers in 2003 and calculated that price appreciation had changed the fundamentals of buying 100% leveraged property in his corner of California. "It's too expensive here," he says. "You cannot buy anything in California that will pay for itself."

So he borrowed $80,000 from his home piggy bank, got a bank loan and returned to his native Argentina to buy a luxury apartment in Buenos Aires for $235,000. The Argentine economy has since mounted a powerful turnaround, driving up Ulivi's monthly rental income by 15% and the value of his property by 50%.

--Andrew Tanzer

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