Option 1
Inherit it or marry it.
Option 2
Own
Getting rich in real estate means owning.
But owning requires money the un-rich don’t have.
To acquire money, first acquire expertise.
Gain expertise working in the industry.
Brokers, attorneys, and consultants make money on friction.
Sometimes big piles of money, but that’s rare.
And even then, they’re rich in cash - not real estate.
Cash is a good start - and end - but in the middle, own.
Learn by doing
Leasing or sales is best, but also learn finance, property management, and construction.
Work hard, get more reps faster.
Learn broad then look for narrow aberrations.
Change companies or roles when the learning slows.
Learn from others
Others have made mistakes
Learn what they were, and don’t repeat them.
Court mentors. Be worthy of one.
Steal their tricks.
Save
Learn on someone else’s dime.
Save dimes.
Getting going requires lots of dimes for pursuit costs and overhead.
Figure on $500,000 - half that for cheapskates, twice that for big spenders.
It may take many years, meanwhile sharpen the saw.
Saved money makes better decisions than borrowed money.
Find an edge
An edge is unique knowledge.
An edge can be a micro-geography.
Or a sub-property type.
Or a specific customer.
Or a business method.
Or, better, a combination of edges.
Combining edges is like a longer password - harder for others to crack.
“Chick Fil-A land leases on mitigated wetlands in western Broward county”
Start narrow, then go deeper, then go wider to scale.
From renovating and owning student housing for deaf kids next to the university to
Renovating and owning student housing to
Owning student housing to
Owning housing.
Capital
With expertise and an edge, just add capital.
Attracting capital requires opportunity.
First, vet a hypothetical investment idea with debt and equity sources before arriving with an opportunity.
Adjust the hypothetical idea and the audience until there’s a fit.
When a fit is found, find a fitting deal.
A fitting deal is the thing an edge is suited to.
The deal the capital sources were looking for.
Take their money and use the edge.
Return more money than was taken.
Repeat.
Use the edge to:
1) buy a property for less than it’s worth.
2) make a property worth more than it cost.
Use the edge to navigate both inflating markets and white-knuckle descents.
Sequence matters
The most important deal is the first one - be smart, don’t screw it up.
Early victories compound, early losses end it all.
Leave the fast fails to techies.
Money loves winners.
Capital is the lifeblood of real estate.
It seeks those that multiply it.
Create a track record, share it, attract investors.
Debt will follow.
Or go it alone, making debt the only partner.
Stay in business
Unimaginable things will happen.
The soup gets thin from time to time.
Thrive on what takes others out.
Don’t bet the farm without other farms.
Build a team
Teams can be in-house or third-party, better a mix of both.
Seek talented, honorable, and driven doers.
Encourage them, consult with them, and take care of them.
This is the lever, make it strong.
Iterate
Find what’s working, discard what isn’t.
Try new adjacent things in small, reversible ways.
Feed what works.
Carve out a brand, a reputation.
Like a chef testing a sauce, adjust the offering to meet the market.
Cultivate creativity and combine it with expertise to create new edges.
Narrow focus has a shelf life.
Evolve or get left behind.
Open the aperture, create what’s next.
Scale
Own a lot of a little or a little of a lot.
Grow either or both the numerator and denominator
Progress to bigger slices of bigger pies.
Good to have some whole pies, too.
Keep learning
Out-learn competitors.
Learn building, design, accounting, law, marketing, leadership, politics, and persuasion.
Then learn other industries and how real estate fits in as part of the whole.
Then start over with literature, history, art, and math.
Collect industry friendships, learn from them.
Uncover information; the best information wins.
See the whole
There’s more to buildings than numbers on a spreadsheet.
Buildings have a real bearing on communities.
Be a steward.
And remember there’s more to living than exacting proformas, so make room for plenty of laughs along the way.
“Enjoy yourselves, keep your brain in your head and your head firmly attached to the body, the body active and alive, and I promise you this much; I promise you this one sweet victory over our enemies, over those desk-bound men and women with their hearts in a safe deposit box, and their eyes hypnotized by desk calculators. I promise you this; you will outlive the bastards.”
Edward Abbey