Becoming a real estate mogul can bring wealth and financial security. There are several different ways that you can benefit from this wealth building tool, including the following:
Even though there are several success stories concerning property investment, being a real estate mogul may not be for everyone. Read on to learn if this trade is a good fit for you.
Vital Considerations for Success
We may have heard it said that what we don’t know won’t hurt us. The truth is, what we are not educated about can be the ultimate cause of our downfall. If we don’t understand the rules of a game, it’s very hard to win. Likewise, if we don’t understand the principles associated with the real estate world, it will be hard to succeed in it.
Real estate, like all financial investments, has risks. There are five critical principles that can help you avoid failure and enable you to have a greater chance at becoming a real estate mogul.
Property Appreciation and Depreciation
Unlike cars, electronics, clothing, and jewelry, real estate does not automatically depreciate once you purchase it. It actually can appreciate, increasing in value the longer you own it.
Make sure you thoroughly understand the contract between you and the mortgage lender. Ask if there is a penalty for early pay off (this is especially important if you are reselling quickly or flipping houses).
By getting pre-approved even before you find a house to buy, many lenders will lock in the interest rate. This way, if the rate goes up while you are looking, you are guaranteed the lower one.
Certain times of the year are considered a buyer’s market; others, a seller’s market. You can consult with a real estate agent to see what the highs and lows are for the locations where you are planning to purchase.
It’s important to understand the risk factors when you are investing in anything. For instance, you should become familiar with the market’s ups and downs. Learn what the market conditions currently are and what the projected trends are predicted to be.
The mindset of a real estate mogul cannot be weary or easily swayed. It’s a tough world out there, and if you do not possess powerful traits, you may not survive. The following are a few characteristics that can help you rise to the top.
People trust people who are utterly and unshakably confident. Great deals are built upon the ability you have to convince people that you are absolutely proficient to see things through.
If you can see the vision of what can be, you can build it even when it can’t be seen. Look past what is present and imagine what the future can become.
An Eye for a Deal
Watch for the great deals and jump on them at the right moment. Otherwise, you may miss the big fish as it swims right past you. Having the foresight to see the opportunities when they arise will allow you to get in on the most providential investments.
Marketing includes selling your properties as well as selling yourself. Knowing how, where, who, what, and when to market will help get your dream off your vision board and money in your bank account.
Having good sensibility means you are wise in navigating the direction of your business ventures. You need to have the audacity to move forward when you feel something is right, and the grit to step back and let go of something counterproductive to prevent further loss. Follow your personal intuition and natural wisdom.
Many successful people have been knocked down time and time again, but they get back up no matter how often they fall. You have to be extremely determined to get past every rut, jump through every hoop, and overcome every obstacle that is guaranteed to come your way.
The Power of Education
Getting your MBA from a school with a strong real estate program can give you a great advantage. Not only will you learn the ropes of real estate laws, but you will understand the technical and instinctive aspects of the trade far better than the novice.
The Different Ways to Become a Real Estate Mogul
Purchase a home that needs minor repairs and improvements. Fix it up and resell it for a higher price.
Research area for resell, price out cost to repair home
Funds for the purchase plus $5K or less for repairs
Contractors for house construction, seller leads, title company
Acquiring Commercial Real Estate
Obtain commercial property and rent the space to businesses.
Research area for tenant potential
Funding for purchase and maintenance
Financing, business tenants
Purchase and rent out homes for monthly cashflow.
Buy, Renovate, Rent, and Refinance
Financing lined up
Funds for buying the first home and renovation
Seller leads, funds to repair and maintain, tenants
Real Estate Investment Trusts either own, finance, or operate income-producing real estate.
Learn the basics how REITs work
Low starting capital
Mutual fund company
On Owning Properties
It may take seven to 10 years or more to obtain your first net worth million in real estate, depending on how motivated you are. Start by purchasing one property. Renovate it, rent it out, and refinance it for more cash to invest in the next property. Continue to repeat the process, renovating the properties to attract good tenants. You need to buy below market value to keep your profit margin high. Keep in mind, you can depreciate or deduct nearly all your expenses on rentals for tax benefits. As you continue to invest, you will eventually reach your first $1 million in net worth.
5 Common Real Estate Mogul Pitfalls
- 1Lacking Planning: Success in business requires success in planning. Plot out the details and stick to the plan even if it seems a little rocky along the way.
- 2Lacking Knowledge: Not knowing enough about what you’re getting into is extremely risky. Study out every aspect before you dive into real estate.
- 3Limiting Market Options: Reach out to more than your familiar neighborhood. Step out of the box and look for diverse opportunities that will allow you to earn great dividends.
- 4Over/Under Renovating: Paying too much for repairs will minimize your profit margin. Undershooting may cripple your ability to sell or rent out the property.
- 5Overpaying: Don’t pay the high price for property, since it will knock your profit margin down from the beginning.
Inspiring Real Estate Moguls
Many millionaires have risen from poverty by building their fortunes through property investment. They ended up becoming real estate moguls, often starting with one investment at a time. Here are five who made it to the top.
Schooling: High school up to 9th grade
After serving in the army, David bought a diner and then sold it for a small profit. He later pursued developing property in Arizona. He continued with his fortune in real estate, now owning a collection of residential and commercial properties in Arizona, California, and Hawaii.
Schooling: Graduated from Arizona State
Josh owned several little businesses as a child. He obtained a real estate license at age 18 and continued until he graduated from college. He then founded SimonCRE, a commercial real estate investment firm.
Schooling: Graduated from University of Washing with a BA in business administration and economics.
Bren built his first house with a loan and soon founded the Bren Company, building homes in California. He started Mission Viejo Company and purchased property for housing developments. He continued to buy more investment firms.
Schooling: University of New Mexico
Carl worked as a vending machine repairman on night shifts to pay for his college. He moved to California and began purchasing real estate. He founded Midtown Realty and focused on the tech industry. Throughout his life, Carl acquired over 100 commercial properties.
Wrapping It Up
Becoming a real estate mogul is a lot of hard work requiring great study, firm resolve, and continual effort. Ultimately, it is worth the labor to reach great success and obtain financial freedom. Check into becoming a real estate investor and see where it takes you.