Real Estate Agent · Cleveland, OH · Member since 2020 · 280 posts · 365 votes
If you were advising a new investor starting out, what would you say would be the fastest way to make a million dollars investing in real estate? When I say fast, I don't mean get rich quick. I mean the most direct route from A to B.
Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
6y
This is going to come down to the individual and their gameplan, current financial situation, risk appetite, and so many other factors. If I was advising a new investor, I wouldn't tell them to worry about how to get to $1M...yet. First focus on understanding the RE landscape, get your feet wet either through investing, brokering, renovating, managing, etc. in the field either directly or through other investors. Then just jump into something you like and see potential with, and try to become an expert at it. The fastest way to your target financial goal will be being an expert within a particular niche and driving it hard.
You can get to $1M in an infinite number of ways, and just because "X" did it in 1 year by using a certain RE strategy doesn't mean that "Y" will see the same results in the same time. Just like a fitness plan, everyone is very different with so many external variables that will play into the outcome. I used to own a gym, and my personal trainers would always tell our clients to focus on what works for them, and create a custom plan based on their current state, limitations, strengths, weaknesses, goals, etc.
I first started investing in C (some people might call them D) neighborhoods in Detroit. I put my life savings into a tiny commercial building, and snowballed my RE business in the city. I was very naive, putting myself at risk every time I went to the buildings as there was a lot of violence around us and even on our block. But this was my specialty; I knew the area, the types of properties I was purchasing, how to genuinely take care of my tenants, how to find good deals, what was a good vs. a bad purchase, etc. What initially gravitated me towards this was the low purchase price and high cash flow, which as a 22 year was all I took into consideration. I slowly divested and have gone away from this strategy recently, but it did more than 5x (cash flow + appreciation) my investment within a few short years.
So if you asked me a few years ago as I was starting out, I'd say that investing in C neighborhoods is the fastest way (which I really believed then). Today, in a different financial state, I will be considering a different route (apartment complexes, hotels, motels, mobile home parks, etc.) in slightly better neighborhoods. Tomorrow, when I have a wife, kids, etc. there will be other variables that will come into play based on the situation at the time that will definitely alter my investing strategy.
Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
6y
I would buy a 4 plex with the VA or FHA. Then sell it or keep adding to it. I wish I would have done that back before kids etc. I think 10 years would be more realistic. Also looking as people can tell looking around right now timing is a big part of it.
If you were advising a new investor starting out, what would you say would be the fastest way to make a million dollars investing in real estate? When I say fast, I don't mean get rich quick. I mean the most direct route from A to B.
Get a website.
Make it credible
Do SEO
Find out the cost/deal for PPC and FB ads
Do both FB ads and PPC.
See which one gets more and better deals.
Get a highly discounted property under contract.
Find a good contractor
Flip that house
With the profits, do it again.
And again.
Now you have 3 flips done.
You should have plenty of money and experience to scale.
Find a few more good contractors
Flip 2 houses at a time.
Get your flipping system fine tuned.
Now flip 3 houses at a time.
Now you have flipped 8 houses
With all that money, experience and a crew, you can not let loose on PPC and or FB ads, and by now you should be ranking #1 because of SEO
Now you go nuts on the leads. Flip the ones that are amazing, wholesale the rest.
If you were advising a new investor starting out, what would you say would be the fastest way to make a million dollars investing in real estate? When I say fast, I don't mean get rich quick. I mean the most direct route from A to B.
Erin,
It's not only about how you invest, it how much you invest. Keeping your personal overhead low enough to accumulate invest-able savings is the key. That key requires deep sacrifices, something most folks don't want to do. House hack, skip my daily Starbucks, drive a junker, pack a lunch, don't use credit to buy depreciating assets, no way Ray.
Build a foundation today so you can have it easier later. Make your assets work to produce more income, accumulate that income to buy more assets. Rinse and repeat. Once you build the base, you can indulge yourself. The secret, though many won't let you in on it, is once you have the means to buy what you want chances are you won't want to buy it any more.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
6y
@Erin Dorsey Robinson you said from personal experience: be a RE agent and work for a landlord with lots of properties. Buy a couple fixers and move in, fix up and rent then move into another, fix up move and rent, buy another fixer, move in, clean up and rent. You get the idea. This has been done by several successful investors on here. After you have a few and some equity you have some credit and can buy to flip an occasional good deal. It helps to have an appreciating market so less is more. Not fast. Oh yeah, good to have a solid income while doing this. Times get tough in the RE business and a w-2 can be a life saver.
Developer · Point Pleasant Beach, NJ · Member since 2015 · 303 posts · 216 votes
6y
@Erin Dorsey Robinson contact property owners to buy their property. Do your best to buy for as under market value as you can. Borrow the down payment and sell for market value. Don’t give it too much thought. Just buy for as low as you can.
Rental Property Investor · CT · Member since 2017 · 24 posts · 17 votes
6y
@Erin Dorsey Robinson on the webinar a few days ago brandon said to buy a duplex and house hack it, the next year buy a four plex, the next year buy another multifamily and so on.
Investor · USA · Member since 2015 · 325 posts · 447 votes
6y
@Erin Dorsey Robinson
The only way to be different from the average person is to make different choices. I have been lucky enough to bet on a lot of good investments over the years. At any point I could have sold out, traveled the world, bought a nice truck, or anything else most people would do.
Instead my wife and I lived way way way below our means and went “double or nothing” back to back to back.
When we were newly weds we were making great money and banked over 5k a month. 11 years later that money just keeps growing.
New to Real Estate · Seattle, WA · Member since 2019 · 39 posts · 16 votes
6y
This is a interesting post for sure. Exciting to see the diverse ways people execute. Although from hearing horror stories of fellow new investors, would it be smart to use a company to manage ones rental properties? Asking cause having someone do this takes away experience but it also takes away the risk of getting in some sort of legal trouble.
Real Estate Coach · Salt Lake City, UT · Member since 2017 · 272 posts · 414 votes
6y
All methods are market dependent.... fastest way will include sheer volume with a little or no money method. Flipping, wholesaling, etc.
For those with normal 9-5 jobs supporting a family that don’t want to assume the risk of quitting... let’s face it, that’s most people... I’d say get a side hustle, cut costs, and invest every available penny into multifamily syndications. I’ve seen models where $1m comes in about 5 years ($50k invested per year, all investments are 5-year holds, 15% returns, 50% cash-out refinances at 2 years, all money reinvested).
Rental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
6y
@Erin Dorsey Robinson
The speed is dependent on circumstance.
So just for speed you would have to find and winnable auction for a foreclosure property at a very very favorable price and in a location that very shortly after your purchase becomes very desirable. This could happen because a major employer makes a favorable decision.
Imagine you hit a really great deal of a foreclosure in Missouri and a few weeks later it is announced that Tesla will build the cyber truck factory there.
You 4 plex you bought and now renovate could be ready for above market rate rents due to the perfect location by the factory.
As prices in the area explode you could potentially get a lot of money. Not sure if it would be a million but you get the idea. That way it might only take 18-24 months.
Those cases are rare. That’s why I help my mentoring clients in the Ideal Wealth Grower System to reach economic independence in about 10-15 years. By then they sure own more than 1 million in real estate and get enough passive income never to have to work again if they don’t want to.
@Erin Dorsey Robinson I’d much rather have $0 net worth and $10k mo in passive income then $1M cash. (Although if I had $1M cash I’d be buying buy and hold’s with leverage for the passive income, debt pay down, and appreciation, tax benefits)
Really.......I get what you're trying to say, but do you honestly think that if you had $10k/month ($12,000 a year) in risk adjusted passive income you wouldn't be a millionaire? I'll one up you..... I'd rather have a $0 net worth and $1,000,000/month passive income!!!
Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
6y
The best advice I have is to just keep putting one foot in front of the other and don't stop. Just like building any business, or getting in shape, or finishing a book. You won't ever get there if you don't keep turning the page.
Rental Property Investor · Pittsburgh, PA · Member since 2019 · 9 posts · 8 votes
6y
@Erin Dorsey Robinson
As many posters have already said there are many different ways to make a million dollars in real estate. You can expedite your wealth by realizing the great advantages that RE investing has to offer.
-Cashflow
-Appreciation
-Mortgage Paydown
-Tax Benefits (depreciation, 1031s, etc.)
Buy and hold allows you to exercise all of these benefits by collecting cashflow each month while your tenants pay your mortgage for you. While your property is being paid for by someone else it is also appreciating in value. This equity can be leveraged to buy more property. Your tax savings spill over to your w-2 income saving you even more money to invest with.
Rental Property Investor · Myrtle Beach, SC · Member since 2018 · 41 posts · 54 votes
6y
@Erin Dorsey Robinson
A (very) brief description of how I did it:
In 2011 (I was 23) I started, with a partner, a marketing company where we brought in contract-workers from out of town/state and provided housing for them (someone else’s). It was an expensive endeavor, housing dozens of people every year, so as the business cash-flowed we put that money into buying our own properties cash.
Even though I thought of myself as a good businessman, and was running a successful company, the intent wasn’t to use real estate as an earnings vehicle. It was simply to reduce our housing cost.
Funny enough, after reading Rich Dad Poor Dad in late 2015, the power of Real Estate finally sunk in. By this time we had amassed a couple million dollars worth of property without leverage.
Almost the day I finished that book the decision was made to work on selling the very time consuming marketing company and focus directly on real estate.
So my path to $1M+ in real estate was a byproduct of building an unrelated business which required 80+ hours/week for 5 years (7 by the time it sold).
From my personal experience, I’d say active income is the fastest way to making a million dollars (cash, cash flow, net worth, whichever your goal is) in real estate.
Once you reach a certain level, you can use your real estate money to make more real estate money.
Investor · Denver, CO · Member since 2015 · 177 posts · 71 votes
6y
That's a good question... it comes down to a few factors for sure.
1. Amount of liquid capital you have or have access too
2. How much you're making in your active "job or business"
3. If you're going to play Active or Passive - meaning are you going to be managing the investments day-to-day or are you working within your money making center in #2, while leveraging someone elses experience.
Based on those answers if you're going the Active route, the quickest way to "Make a Million" is going to be flipping assets, buying something, increasing the value and selling it. That could be houses or apartments or anything. The timeframe for houses is shorter, typically under a year and for Apartments it could be 1 year or it could be 5. The key here is of course buying right, managing right and selling right.
On the passive side, it's going to take longer, but if you have enough capital to inject into the investment you can reduce the timeline significantly.