Real estate is a great investment. It’s a well-known fact that has been tested over time and proven true. Real estate entrepreneurs have discovered it’s one of, if not the most, safest investments you can make. Many people built their fortunes through this industry, including former US President Trump and his father. And the best thing about real estate investing is that it comes with fewer risks and a rather straightforward way to success. As long as you can obtain financing for the property and choose that same property well, you will be on your way to early retirement.
The first and most important thing you need to become a real estate entrepreneur is the capital to invest in your plan. Whether you choose to buy a fixer-upper, build from the ground, or buy a property that can be rented right away, money is key. This is a lesson that all leading real estate agents can agree on.
Of course, if you don’t have a fortune of your own to make your first real estate investment, financing will be your greatest challenge. In fact, even if you do have the money, it’s more savvy to use commercial construction loans or other specialized types of loans to fund such grand projects. This will provide you with an additional layer of security. In the meantime, you will be able to use the bulk of your fortune to finance marketing and other areas of your business.
Loans are the most common type of financing real estate projects because they are the most cost-efficient as per the real estate market research. If you find a reliable private money lender, you will be able to have a great start in this business with a relatively small initial investment. That’s why it’s essential to study every financing opportunity you have available. Always compare all the options you have in order to choose the one that’s truly the best in the long term.
You can also consider finding investors or partners for your project. Applying for a big commercial loan might be easier when you do this not as a single investor but as a group.
The other important factor that will determine the success of your real estate investment business is the choice of location. And this is one of the things that make property such a “safe” choice. There is always some place in the world where real estate is booming. Even now, when the pandemic has caused a global crisis, some property markets are more welcoming than ever.
The challenge in picking the property to invest in is predicting its long-term value. For example, commercial properties, especially office space, were the leaders for good ROI over the last few years. However, the pandemic dropped the value of these properties almost overnight.
The residential housing sector, on the other hand, is growing hotter in many countries. But the hospitality industry is struggling, so vacation homes and hotels are now investment sinkholes.
Adapting to the circumstances is essential for real estate investment success. But of course, one cannot predict the future accurately. Therefore, it’s very important to keep your real estate investment portfolio diverse. Also, it’s a good idea to see at the history of successful tycoons and learn from their experience.
Donald Bren makes a great example of how portfolio diversity a lead to real estate investment success. His property empire is mostly based in California, which is an important factor in his prosperity. This is a place where the price of property and land is among the highest on the planet.
Brent made his first most important investment here back in 1977. That was when he purchased a big part of the stock in a company that owned Irvin Ranch in South California. By the year 1996, he became the sole owner of this company. Therefore, he has shown great business acumen seeing that the value of this land will keep on growing.
Today Bent’s real estate empire includes over 550 office buildings, dozens of retailer centers, hotels, over a hundred apartment buildings, and even marinas and golf courses. Not all these properties are indeed equally profitable all the time. However, due to the diversity, this empire remains strong and growing overall.
Dottie Herman isn’t the richest of real estate moguls in the world, but her road to success is truly inspirational. Unlike investors who went for property first, she invested in a real estate brokerage.
It must be noted that she is one of those people who had nothing at the start. She lost her mother at 10 and struggled with helping raise her siblings while also working hard on “making something of herself”. She started to work in a real estate brokerage while still at school and eventually purchased Prudential Long Island Realty.
At that time, it was discarded by its previous owners. However, with time, Herman not only made this business thrive but also purchased the biggest real estate brokerage in Manhattan, which has grown further under her leadership. At the moment, this company, Douglas Elliman Real Estate, is the fourth biggest business of this type in America.
If you are most interested in real estate development, your inspiration should be Wang Jianlin, the chairman of Dalian Wanda. He ranks 36th on the list of the richest people in the world. His road to success is very unique. Initially, he was a soldier, who joined the military when only 15.
Despite climbing through the ranks, Wang Jianlin was decommissioned before he reached 30. Then he went to work in the civic sector of Dalian. Eventually, he found his way to Dalian Xigang, a struggling developer in the region.
With his help, this developer transformed into Dalian Wanda, which is currently one of the top developers in China. Its fortune started by building commercial properties, specifically shopping centres. At the moment, Wang Jianlin is one of the richest men in China as his stock in Dalian Wanda Group and its subsidiaries exceeds $25.6 billion.
Stephen Ross is a real estate mogul who can teach you a thing or two about strategizing for the times. Many investors are focused on commercial developments, residential housing, or the hospitality sector. Ross’s development and investments are versatile and therefore, include many of these projects. However, he also has a clear sight of the current realty market situation.
That situation shows that homeownership rates aren’t doing too well due to unfavourable mortgage rates. But the demand for rentals keeps growing as those who cannot afford to buy their own homes must become tenants.
Catching the trend is something that Ross has been good at since the beginning of his real estate career. He started with literally nothing but a loan at his back and his first business was not investing but setting up deals for those with the fortune to pour into development projects. As an attorney, he managed to raise funds to start his own development company and eventually become the top real estate tycoon in New York.
Essentially, Sam Zell is the father of REITs, which are real investment trusts. He started his equity company Equity Group in 1969 and focused on REITs, which were only emerging at the time. He caught the right trend as today his net value is nearing $5 billion.
Sam Zell is the person whose story you definitely should study closely because he is a man of exceptional business sense. One of the greatest examples of how he can “feel” the market is the sale of Equity Office for $39 billion. That REIT deal is not only one of the greatest in history. It’s also one he completed right before the great housing market crash of 2007.
You definitely can thrive in real estate even if you start with a rather small capital. This business is all about making the right decisions oriented toward long-term gains. And most importantly, real estate investments remain strong even in difficult times. You can see this now as property markets are booming in many countries, despite the coronavirus crisis. Therefore, now is the greatest time to start your investment portfolio in real estate. But when you do this, be sure to remember the lessons taught by those who have already become tycoons in this industry. Also, keep in mind that your initial financing is the most important factor to consider when taking this investment path.
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