Listener 5 December, 1998.
Keywords: Business & Finance
Use $20,000 to deposit on a $100,000 house, borrowing $80,000 from the bank. Get a friendly valuer to say the house is worth $200,000. Get the bank to lend you another $80,000 against the value of the house (so you have a mortgage of $160,000). With the $80,000 of cash the bank has just given you, buy another four $100,000 houses, borrowing another $80,000 on each house. Get your pet valuer to double the price of the four new houses, so your houses are now worth a $1,000,000. You can borrow an extra $320,000. Repeat.
