How Big is Your Empire?

Question

Hey BP community,

I recently joined BP and I see it's a very active community for networking. I have spoken to all walks of life from residential investors to commercial office space investors and real estate developers. When I ask the question "what's the goal?", the answer always seems to be "more".

With that being said, I'm curious to hear from the BP community on this. How many rentals do you own and how many are you trying to accumulate?

Is too much a headache, or with the right management company in place, is it worth it?

For me, my goal is to own $50 million worth of rentals. Sure, to some, this may some unrealistic. But anybody involved in real estate with ambition knows the power of leverage in real estate.

Looking forward to the reponses!

Johnoson Crutchfield · Answer

Mindset is everything.  You can own 50 million in real estate if that's your goal.  It's all about how you set up your systems and organization.  Good to start small to learn the systems and then stretch yourself deal after to deal.  The bigger problems you can solve, the more you can achieve.  I'm currently solving problems for 100 rental units, but soon I'll be solving 500 unit problems, then more.... You can do it if you're willing to develop systems to do the work for you.

Timothy Hero · Answer

Thanks for your response Dawn.

I think you make a good point. My goal is based on value as well, instead of number of units. I'd rather own an apartment building worth $5 million with than to own 50 SFH's totaling $5 million.

Timothy Everding · Answer

I own 62 doors and am always looking for more. With each new deal, we have to stretch and learn which is also part of the fun. Gole is to go to 500 million crazy but I have a team in place to keep it going.  Spend most of my time now looking for more deals. Moving for SF to large apartments is our next step.

Darius Ogloza · Answer

As I get older, I am becoming more and more fond of the concept of "enough."

However, I know no better feeling than finding that diamond in the rough and beating other investors/buyers to the closing.  Always room for one more.

Joe Splitrock · Answer

@Timothy Hero why do you want to own $50M worth of real estate? Are you prepared to sacrifice time with your family to reach that goal? Say you are at your kids soccer or baseball game and you have to leave to tend to an emergency - is that worth the $50M?

My point is you picked some huge arbitrary number. If you really owned $50M worth of real estate, you could expect millions of annual income. Why do you need that much money? Are you seeking status? More money than you can spend?

The answer is different for everyone, just make sure your goals line up with what you value most.

Ronan Donnelly · Answer

Hi @Timothy Hero and welcome to BP. One of the areas of BP that I have personally found to be most helpful is about how to condition your mindset and to set goals. Setting big tragets is a great way to stretch yourself, but it isn't enough. Start with understanding your deeper motivations, your "Why?". Once you understand that you will have greater clarity and purpose.

A few other things

1) Having $50m of assets doesn't imply success since they could be underwater and negatively cashflowing. What you likely really want are equity growth and cashflow

2) Work backwards from the 'big' goal and understand what you have to do to get there e.g. buy x units that cashflow $y per month

3) Set some interim goals to give yourself small wins. It can be easy to give up when we are far away from our goals and hit resistance. The path to success is non-linear and you will need a strong mindset to push through to the part where you experience rapid growth

Good luck and don't forget about me when you are worth $50m!

Account Closed · Answer

50 M in RE doesn’t really tell a whole lot .  You can get there but do you want to be leveraged at 45M to get there, with investors being the equity on it.  Slow growth on the 3M plan self fueled?  Just something to consider .... But maybe have half in equity?

Timothy Hero · Answer

$50M is just an idea figure I threw out there. $50M in assets is ideal for me.

Joe Splitrock · Answer

They can manage the properties, but who manages your business? Who grows your business? Stepping up to $50M will take many years effort and considerable time.

Timothy Hero · Answer

In the right city, some investors are getting 10-15% cap returns on vacation rentals.

How Big is Your Empire?

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