Justin French Explains The Freedom Five Formula: How Five Rental Properties Can Build Long-Term Financial Freedom

An exclusive Q&A with Justin French, entrepreneur, CEO, real estate developer and author of The Freedom Five Formula, on building wealth through rental properties, buying your first investment property and why time in the market may matter more than trying to perfectly time the real estate market.

For many aspiring real estate investors, the idea of building a massive portfolio of 50 or 100 rental properties can feel unrealistic.

Justin French believes there may be a simpler path.

In The Freedom Five Formula, French lays out a long-term real estate investing strategy centered around an attainable goal: start with one income-producing property, build toward five, and give those assets time to work.

“You don’t need 100 properties to build wealth,” French says. “You need the right five.”

French’s philosophy isn’t built around flipping houses, chasing the hottest real estate market or trying to get rich overnight. Instead, the Freedom Five strategy focuses on acquiring quality rental properties, holding them for the long term and allowing potential rent growth, mortgage principal reduction, appreciation and other benefits of real estate ownership to accumulate over time.

We sat down with Justin French to discuss The Freedom Five Formula, the realities of rental property investing, today’s interest-rate environment and what someone who wants to build financial freedom through real estate should do first.

What Is The Freedom Five Formula?

Q: Justin, for someone hearing about it for the first time, what is the Freedom Five Formula?

Justin French: The Freedom Five Formula is really a simple approach to building long-term financial freedom through real estate.

The idea is to start with one investment property and work toward owning five.

You don’t have to buy five tomorrow. You build the portfolio over time, and then you give those properties time to work for you.

Your tenants are helping pay down the mortgages. Rents can increase. Property values can appreciate. And over time, you’re building equity and potentially creating significant cash flow.

It’s not about getting rich quick.

It’s about getting wealthy slowly—and intentionally.

Why Five Rental Properties?

Q: Why five? What makes five properties such an important part of the strategy?

Justin French: I wanted to create a goal that felt meaningful but achievable.

SDIRA Wealth has been working with real estate investors since 2001, and what we’ve found is that for the average investor we work with, five well-selected properties can be enough to create the level of long-term wealth and income they’re trying to achieve.

People hear stories about real estate investors owning 50 or 100 properties and immediately think, “I could never do that.”

But you may not need 100 properties.

Imagine eventually owning five quality rental properties with little or no debt against them. Those properties could potentially create meaningful monthly income while also representing substantial accumulated equity.

Five isn’t a magic number. It’s a clear, achievable target that gives people a plan they can actually understand.

Start with one. Build toward five. Give them time to work.

The goal isn’t to own the most properties.

The goal is to own enough of the right properties to create the freedom you want.

Why Justin French Wrote The Freedom Five Formula

Q: What inspired you to write The Freedom Five Formula?

Justin French: I’ve spent two decades in real estate, and over that time, I’ve had the opportunity to watch thousands of investors build wealth through real estate.

One of the biggest lessons I’ve learned is that people often make investing much more complicated than it needs to be.

There’s always another distraction.

The next stock. The next cryptocurrency. The next hot real estate market. The next strategy that’s supposed to make somebody rich overnight.

But some of the most successful real estate investors I’ve watched weren’t constantly chasing something new.

They bought good real estate in good markets, held it and gave it time.

That’s one of the reasons I wrote The Freedom Five Formula. I wanted to take those lessons and create a strategy an everyday investor could understand.

Time in the Market vs. Timing the Real Estate Market

Q: You talk about “time in the market.” Why is that so important in real estate investing?

Justin French: Because you’re probably never going to perfectly time the real estate market.

I’ve been through multiple real estate cycles. Interest rates rise and fall. Housing markets accelerate and slow down. Economic conditions change.

People can spend years sitting on the sidelines waiting for the “perfect” moment.

My philosophy is different:

“Don’t try to time the market. Give yourself time in the market.”

If you buy the right property, in the right market, with numbers that make sense, then give the investment enough time, you don’t have to be right about every short-term market movement.

I’m much more interested in where an investment could be 10 or 15 years from now than where the market might be six months from now.

How Rental Properties Can Build Wealth Over Time

Q: What is actually happening financially while someone holds these properties for 10 or 15 years?

Justin French: That’s the part people sometimes underestimate.

Potentially, several things are happening simultaneously.

Your tenant is paying rent, which helps you pay down the mortgage.

Your loan balance can decline.

Rents may increase over time.

The property may appreciate.

You’re building equity.

And depending on an investor’s individual circumstances, real estate ownership can also provide certain tax advantages.

None of those things should be treated as guaranteed. That’s why selecting the right property, understanding the numbers and maintaining adequate reserves matter.

But when you own good real estate for a long period, you’re giving several potential wealth-building forces an opportunity to work together.

“Wealth is built in the years when nothing exciting seems to be happening.”

Is Now a Good Time to Buy Real Estate?

Q: What would you say to someone who says, “Interest rates are too high. I’m going to wait”?

Justin French: I’d ask them a question:

What exactly are you waiting for?

If interest rates decline, affordability could improve. But lower rates could also bring more buyers into the market and create additional competition.

Rather than trying to predict exactly what rates will do, I want to know whether a particular investment makes sense today.

Can you afford it?

Does the property work financially?

Are the market fundamentals strong?

Do you have sufficient reserves?

Can you hold the property through changing market conditions?

If rates eventually decline, refinancing may become an option, depending on the circumstances.

“I’d rather own a great property at an imperfect time than wait forever for the perfect time.”

Why Market Selection Matters in Real Estate Investing

Q: What’s one of the biggest mistakes you see new real estate investors make?

Justin French: Chasing the deal instead of understanding the market.

A cheap house isn’t necessarily a good investment.

Before buying, I want to understand what’s happening around that property.

Are jobs growing?

Are people moving into the area?

What’s happening with housing supply?

Is there strong rental demand?

What are property taxes and insurance costs?

Is quality property management available?

The individual property matters, but so does everything surrounding it.

That’s why I tell investors:

“A cheap property can be an expensive mistake.”

Is The Freedom Five Formula Only for Wealthy Investors?

Q: Do you have to already be wealthy to use the Freedom Five strategy?

Justin French: No. But I also don’t want to create the impression that everyone is financially prepared to purchase an investment property today.

Real estate requires capital.

You need reserves. You need to understand financing. You need to be able to withstand vacancies, repairs and unexpected expenses.

For some people, the first step isn’t buying a rental property tomorrow.

The first step is getting financially prepared to buy one.

And that’s okay.

The objective isn’t speed.

It’s direction.

How Much Cash Should Rental Property Investors Keep in Reserve?

Q: How important are cash reserves when building a rental property portfolio?

Justin French: Extremely important.

I prefer investors to be conservative because real estate isn’t perfectly predictable.

Vacancies happen.

Repairs happen.

Insurance costs can change.

Taxes can change.

Unexpected expenses happen.

I don’t want someone owning five properties if they’re so financially stretched that one unexpected repair creates a crisis.

The objective isn’t simply acquiring real estate.

It’s being financially strong enough to hold it.

What Stops People From Buying Their First Rental Property?

Q: What do you think keeps most people from buying investment property number one?

Justin French: Fear and uncertainty.

People ask:

What if I get a bad tenant?

What if something breaks?

What if real estate prices fall?

What if I choose the wrong property?

Those are legitimate concerns.

The goal isn’t to pretend risk doesn’t exist. The goal is to understand the risks, prepare for them, maintain reserves, surround yourself with experienced professionals and make an educated decision.

You can spend your entire life waiting until you feel 100% certain.

You probably never will.

“Your first property is the hardest. Your fifth is the result of what you learned from the first.”

What Does Financial Freedom Actually Mean?

Q: You use the word “freedom” throughout the book. What does financial freedom mean to you personally?

Justin French: Financial freedom isn’t necessarily about never working again.

For me, it’s about choices.

It’s deciding how you spend your time.

It’s having more time with your family.

It’s being able to help other people.

It’s making decisions because you want to make them rather than because you desperately need another paycheck.

That’s the bigger purpose behind the strategy.

“Financial freedom isn’t about having more money. It’s about having more choices.”

And ultimately:

“Five properties isn’t the destination. Freedom is.”

What Would Justin French Tell His Younger Self?

Q: If you could go back and give your younger self one piece of real estate investing advice, what would it be?

Justin French: Understand the value of time.

When you’re young, you think you have plenty of it.

But time can be one of your greatest assets as an investor.

A property purchased today could potentially have 10, 15 or 20 years to work.

That’s why so many experienced real estate investors eventually say, “I wish I had started sooner.”

You can’t go backward.

“You can’t buy real estate 15 years ago. But you can decide what you’ll wish you bought 15 years from now.”

How Do You Start The Freedom Five Formula?

Q: Someone finishes The Freedom Five Formula tonight and decides they’re ready. What’s the first thing they should do tomorrow?

Justin French: Don’t wake up thinking, “I have to buy five properties.”

That’s overwhelming.

Ask a much simpler question:

What would it take for me to responsibly buy property number one?

Look at your financial position.

Determine how much capital you have available.

Understand financing.

Build appropriate reserves.

Learn how to evaluate properties and markets.

Surround yourself with the right professionals.

Then create your plan.

“Don’t ask, ‘Can I afford five properties?’ Ask, ‘How do I get property number one?’”

That’s where the journey begins.

The Freedom Five Formula in One Sentence

At its core, Justin French’s Freedom Five Formula takes an intentionally simple approach to real estate investing: acquire quality income-producing properties, build toward a five-property portfolio and allow time to do much of the heavy lifting.

Or, as French puts it:

“The Freedom Five isn’t about collecting houses. It’s about buying back your time.”

His message for aspiring real estate investors can be distilled into four short steps:

Start with one.
Build toward five.
Give it time.
Live with freedom.

About Justin French

Justin French is an entrepreneur, real estate investor, author, and CEO of SDIRA Wealth. With 25 years of experience in real estate, business, and leadership, French has focused his career on helping investors build long-term wealth through real estate and other real assets.

As the author of The Freedom Five Formula, French advocates for a simpler approach to real estate investing: start with one income-producing property, build toward five, and give those assets time to work.

Through SDIRA Wealth, French and his team provide education, resources, and access to investment real estate designed to help everyday investors take practical steps toward greater financial freedom.

Start Your Freedom Five Journey

Ready to learn more about The Freedom Five Formula and take the next step toward building long-term financial freedom through real estate?

There are two ways to get started:

Become a Free SDIRA Wealth Member

Join the SDIRA Wealth community and get free access to The Freedom Five Formula along with additional real estate investing education, workshops, resources and exclusive content designed to help you become a more informed investor.

→ BECOME A FREE MEMBER & GET THE BOOK 

Or Get the Book on Amazon

Prefer to go straight to the book? The Freedom Five Formula by Justin French is available on Amazon in paperback and Kindle formats.

It’s also available to read with Kindle Unlimited.

→ GET THE FREEDOM FIVE FORMULA ON AMAZON

Start with one. Build toward five. Give it time. Live with freedom.