INCOME POTENTIALS???!!

Vince here. I am very new to the business, so pardon me if this sound naive. I was wondering how much money one can make wholesaleing, flipping houses,(basically in the real estate business) etc. I am a hard worker, currently a student. and every meeting i go to, some guru always comes up to me promising millions. I am not afraid of working hard and 'getting rich slow and steady', so i would appreciate an honest answer. I know this sounds cliche, but how much money can one expect to make if you put your heart and soul into this business(over 5 years, 10 year time period)?? Again, i would really appreciate if i could talk to anyone over the phone, etc about this, please let me know.

Edited: 06/26/2010 at 09:01AM

Blake Copeland

Real Estate Investor · Austin, Texas

76 posts
352 Influence
2 Awards

Icon_minipost Aug 31 '09, 08:47 AM

Well, I know people who have been in the REI business for 10 years and own commercial properties valued at over $25M. That's what the reality for them is NOW, but I think everything starts off gradually. One step after the next. Obviosuly, their first few years in business was nothing like it is now. It takes making mistakes, building your network, building credibility, etc. That of course all takes time and dedication which basically can't be shortcutted. It takes hard work.

Gurus will tell you whatever will get the money out of your pocket basically. I mean it sounds very motivating when a guru tells you that rehabbing 10 houses a month is a walk in the park and you will pocket $50,000 per house no problem. Well, I used to be swayed by these gurus to an extent. UNTIL I actually stepped out from the crowd of "Non-Action Takers" and went for it.

In my personal experience it is VERY difficult if not impossible ((and i really don't like using that word)) to rehab 10 houses PER MONTH. Those of you who have done rehabs know what I am talking about. If someone has some kind of system and is rehabbing this many properties per month Please let me know about it!! I was rehabbing about 6 at a time at one point and that was A LOT in my opinion (it sure felt like it to me anyway)

Anyway.... How much can you make??? I'm not really sure that there is a limit to how much. There are so many variables and ways to make profits in real estate that it's a very hard question to answer. I've met developers who make over a million bucks a month ((but have been in the business 25+ years and went broke more than once)) Also met wholesalers who make $30k a month. Also met Realtors who make less than $25k a year. So it's pretty varied. I think if you set goals and know where you are going, you'll have a better shot at getting there. I say read the posts and forums on here, and get a feel for what you might "see yourself" doing. Then take action. Don't spend a year or 2 years reading books with no action. Everything you need to learn is either on this website OR you will learn it in real life by going out and doing it. Just my opinions though. There are investors on here that are way more experienced than me, and I learn a lot from them, so should you.

Edited: 06/26/2010 at 09:33AM

J Scott

Real Estate Investor · Atlanta, Georgia

6086 posts
66741 Influence
13 Awards

Icon_minipost Aug 31 '09, 10:58 AM

In terms of how much you can make, the sky's the limit...it really depends on the type of investing you do, your market, how good you are at it, the resources you have, etc.

It also depends on how you structure your business. Do you want to do all the work yourself? Or are you willing and able to hire/manage employees to do much of the work, allowing you to focus on scaling your business?

I can only speak as a house flipper (rehab and resell) and the way I do business...but here's what I've done...

In my first year, my company had one full-time employee and my wife and I worked part-time (about 10-20 hours/week). We were able to flip a dozen houses my first year pretty easily.

We're now in our second year, and we'll likely flip about 25 this year with the same level of effort (one full-time employee, and half-time for my wife and myself).

I have a feeling that we could likely scale that up to about 50 houses/year with another employee or two, once we got all our processes streamlined. I probably won't ever go that far, as I'm only planning to be in this business for another two years or so...but based on my experiences, 50 houses per year is probably about the most a small-business could handle before the overhead expenses stopped scaling.

As for how much money that translates to, that really depends on your market. In my market (Atlanta suburbs), we make about $20-25K per house, but people like Will (nationwidepi) appear to be making 5-10 times that much per house, in the southern California market (though I'm guessing that has as much to do with his skill as it does with the market).

So, there's really no reason why you couldn't easily make $1M+ flipping houses if you put your mind to it and find the right market. You need some business and people management skills, you need the financing, and you need a great team, but it's definitely possible.

And that's just flipping houses. Other types of investing are certainly more profitable given the experience and hard work...

Edited: 06/26/2010 at 09:33AM by J Scott