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Buying and selling real estate is sexy and you can get rich doing it. But true generational wealth is created when you hold great assets for a really long time. Figure out a way to structure your deals accordingly.
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Your goal should be to get some cash working in the deals as soon as possible. OPM (other people’s money) is expensive. If you can get to the point where you do your best deals with your own money, you’ll get wealthy fast.
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The person with the cash calls the shots if they are the only person you can get cash from. Cast a wide net. Don’t put all your eggs in one basket. Get a lot of LPs in early deals and knock it out of the park. The more investors you have access to, the better terms for you.
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Real estate isn't passive. Operations is the major risk factor of real estate. If you can’t manage revenue and expenses you will lose. Real estate is a small business with tax efficiency. Treat it as such and focus on the operations.
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As you gain more wealth the goal should be to get more control over of what you need to go right to make a deal a good deal. Things you can’t control: Interest rates Debt accessibility What someone else will pay for your property Depending on these things less to lower risk.
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Your equity means nothing. And it changes wildly based on things outside of your control (mentioned above). Turning equity into cash isn’t easy. Selling takes time and money. Cashflow is everything.
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And rule #1: Choosing your competition is the key to success. The lucky thing for you: There are a lot of folks making great money in real estate doing business like it’s 1985.
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Another bad piece of advice I see ALL THE TIME here is that managers should optimize for occupancy. Full = properly managed. WRONG. Revenue is what matters and the best managers drive revenue.
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