How to Build a Real Estate Empire From the Ground Up

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Real estate is a great business, not just because it can create enough income to allow people to quit their job or retire early, but because it can make you rich.  Last week I wrote about why it is important to think big, and this article is all about thinking big!

How can you go from nothing to a multimillionaire with real estate?

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The First Step to Building an Empire is Deciding the Route to Take

When starting out in real estate, the first question many consider is whether to buy and hold or fix and flip.

I have 11 rentals and 10 fix and flips that are in various stages; thankfully two are under contract! I love to use the income from fix and flips to buy long-term holds. I think if you want to really make it big in real estate you have to use every aspect you can.

Why not fix and flip and buy and hold?

The Benefits of Flipping and Holding

Many properties work great for flipping and others for holding.

If you can do both, it moves you along the wealth building road.  It is great if you can learn to invest with little money down, but the truth is you will make more money if you have some skin in the game.  If you can begin flipping homes to build up capital I think that is a great way to build up money to buy long-term rentals.

If You Don’t Have Money to Hold Properties or Flip

Getting started in real estate is not east without money, I don’t care what anyone says.

It seems like most real estate investors without money want to wholesale to start out.  I am okay with wholesaling to build up cash, but it’s not easy.

If you take the time to learn direct marketing and wholesale off market properties, you can make good money.  With that money you can start holding and flipping.  If you expect to make a killing off wholesaling by Realtors handing you deals off the MLS, think again.  It will take hard work and dedication to be a great wholesaler.

Related: The Hidden Key To Success In Real Estate Investing

Once You Have Some Money

If you have some money, you should be able to start flipping houses to make even more money.  Once you have a decent amount of capital from flipping, you can start buying rentals, but that is not the end game.

The more money you can put back into the flipping business the more properties you can flip, and the more money you can make flipping.  I would not take all the profits from flipping to buy rentals because you can make a great living flipping.  It is a tricky balance of how how much flipping you want to do versus how many rentals you want.  While flipping can produce a lot of income, it is not passive and you must keep working to generate that income.

The goal is to make enough money flipping to build up enough rentals.

Why Longterm Rentals?

If you can buy enough rental properties, you can build up passive income that will keep coming in every month.  I have $60,000 a year coming in from my rentals, which is a great start.

I also have built $600,000 in net worth from my rentals, but that is a paper gain.  The end goal may not be buying enough rentals to provide a solid income, but to provide a cushion for even bigger ventures.  I have a goal to buy 100 rentals, but that could always change if I find something bigger and better to do with my money.

I Have a Solid Rental Income. Now What?

The great thing about having a solid rental income is it gives you freedom.  Once you can cover your expenses with rental income, you can explore more options.

That cushion allows someone to take risks and not have to worry about losing everything.  After all, you have a solid base to fall back on.

Ventures to Undertake After Building a Solid Income

Focus More on Flips and Building Income

You can start pumping all your capital into the flipping business to see how big you can grow it.  I know an investor who flips over 1,000 homes a year.

Focus on Buying More Rentals to Make Your Life Even Better

I have a goal to buy 100 rentals, which will provide an awesome income, but that may not be big enough or fast enough for some people.  Some of use have to pay for our fancy cars!

Focus on Big Projects with Huge Upside

You could move on to big commercial or multifamily projects that are riskier, but come with a higher profit potential.

Start a Business

Many of us have always wanted to start a business that we thought of long ago.  We never did because it was risky, we didn’t have time and we were scared.  Having a sold income takes care of most of those problems.  The really rich get rich from starting their own business.

Related: How to Get Rich: 7 Awesome Ways to Build Big Wealth Today

Many people get very rich in real estate, but it takes more than a few flips or rental properties.  The ones who get really rich use development, large projects or flip and hold for years.  Don’t be afraid to think big and start planning out how things are going to move forward.

A Quick Recap

1.  Make enough money to start flipping through a job or wholesaling

2.  Start using that money to buy rentals that will produce income

3.  Keep building up the amount of rentals and flips you are doing

4.  Use the comfort from the rental income to build big or go after your dreams


You don’t have to follow this plan — you could go straight to the make it big part, but it will be harder without money, experience or the comfort level.

Some think having a safety net is a bad thing because you know you have something to fall back on.  Without any cushion, you have to succeed or starve.  I think you can do it either way, but doing it with a level of comfort sure reduces the stress and chances of a massive stoke.

Are you approaching your real estate business with a safety net or do you err more towards the side of reckless abandon? What business would you start after raising enough capital?

Let us know in the comments!

About Author

Mark Ferguson

Mark is Real Estate Broker and investor in Greeley, Colorado. Mark invests in long-term SFR rental homes and also does 8-15 fix and flips a year. Mark started a blog this year that focuses on investing in long term single family rentals.


  1. This is an excellent article and I love your approach. I’m strongly considering wholesaling as another means of generating additional cash flow to help supplement my “buy and hold” strategy.

  2. Great skeletal business plans for organizing a real estate investment. Only thing I would add is to tell beginners to make offers. It amazes me, but I see it again and again, investors reluctance to make offers. You cannot get what you what you do not ask for.

    • Tim- you are correct about making offers…. low offers. I’ve been seeing the prices of homes that SOLD in my area and think to myself, crap if I knew they’d take that little I would have bought that one! Someone else did make that offer, and they got it.

      • I think that there are a few important nuanced differences between the cash-flow of a rental house and a promissory note.
        1. The investor does not own the house. They are the note owner. pure income. No tax shelter.
        2. If a cash-crunch (should I say..when a cash-crunch) hits, it’s easier to get money from a note than pull money out of a mortgaged property (that’s a very broad statement).
        3. Reclaiming a property is very state-dependent. In Texas, one can foreclose faster than they can evict. In other states, Foreclosure may take you an excess of 9 months. Be very aware of the laws when you choose to either be a landlord or the bank. Allowing someone to occupy your property for months on end can make for a very sour investor. Or worse, it can turn a new investor into a former investor.
        4. Bankruptcy interferes with foreclosing, but not an eviction. Bankruptcy is a note holders arch enemy. Plan for it.


  3. Colby Litzenberger on

    Good article thanks Mark. Simple and straightforward as it should be. As a newbie its easy to over complicate things and not see the forest for the trees which doesn’t allow one to plan for the future.

  4. Mark, I like Your approach. This is the plan for me. Look at every property I can make offers that work for me and have a back up plan if exit strategy doesn’t work. I LOVE THIS BUSINESS. Yesterday I offered $20K for a 2700 Sf 3 Bth home because that was what it was worth. He wanted $60K. We had a good conversation and I walked a way with a new contact. Today i bid on a home on until it went over $6k because that was what it was worth. No more. Nice home but poor neighborhood and strict HOA. It sold for $7.5K. Too much, So we keep looking and hopefully buying. 3 homes so far, 2 flips and one rental. Thank You for Yours and everyone’s help. Tom & Roni.

  5. Chad Carson

    Hey Mark. Nice article. It’s basically the same plan I’ve been using.

    I know you talk about it in other places, but you didn’t mention here about when to pay off the rental properties. I think that’s a critical part of the plan. So should I pay off my rentals early or use the cash to buy more rentals? Not an easy decision. Sometimes that added security from paid off properties gives you more confidence to climb faster later.

    I have been thinking about it like climbing a mountain, so I like the resting places (subgoals) along the way up. In your example, 10 free and clear rentals would be a nice resting place on the way up the mountain to 100. 1 free and clear would be a resting place on the way to 10.

    Keep up the good posts!

    • Mark,

      Solid article. And like Chad, pretty much the same strategy I am pursuing. I appreciate that you incorporate possibly pursuing other business interests once you’ve got your monthly income cushion. You’re a couple of steps ahead of me on the plan.

      Chad, I would only pay off rentals if I had money that I had no plans for in the next year or so. I’d be more inclined to keep new buys free and clear. Of course, I’ve only got 10 now and may find traditional lending hard to come by after not too many more. I haven’t decided what I’ll do when I hit that road block.

  6. 11 rentals are producing $60k/year?
    60,000/11 = 5,454/12 = $455/month average monthly cash flow per property.
    That seems high in comparison to both the example deals I see in postings and the ones that I’m able to find in my market (Indianapolis).
    Which market(s) are you in? What are the average rents? Do you own them outright, or are there mortgages in place? Do you operate yourself or use property management?
    I currently own 2 headaches, I mean rentals, and I spend a lot of time wondering how many properties it would take to support a decent lifestyle. I’d just like to know some of the particulars for the model you’ve built…

      • Thanks. Those numbers are helpful. The 2 that I currently own rent for $800 and $1,000. The one that rents for $800 looks good on paper, but the cash flow does a bit of a disappearing act due to vacancy and maintenance. It’s hard to find good renters for that one.
        The other performs closely to the way I projected when I bought it. I may consider moving slightly upwards on the rent scale for future deals.

      • Mark, those rent:mortgage numbers look pretty good. Is the large spread due to principal paydown or are you just finding deals that good? Thanks for the awesome article!

  7. Hello All,
    I usually attack with reckless abandon and am always looking for a plan B to finance… I just need to catch a single break and get an owner who is willing to finance, that way, I get my foot in the door and there will never be time or a chance to look back! Look out world, here I come!…..haha Best of luck to all of you as well.


  8. Garrett May

    Mark, I enjoyed reading your blog. I just purchased my first rental property a few weeks ago and I know that I want to purchase more for passive income. Your fix and flip concept makes sense to use those funds to acquire more rentals. I plan to learn as much as I can through this journey and get out there and try some different things to help me reach my retirement goal with real estate. Thanks.

  9. Drew McLeod

    Thanks for this post Mark! How do you feel about someone who has a full-time job and uses their income from their job to invest in rental properties as opposed to focusing on flipping homes? Can someone properly flip homes if they have a full-time job?

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