Epic Real Estate Investing - How to Become a Billionaire in Real Estate (3 doable ways!) | 1212

Episode Date: June 16, 2022

 In today’s episode, Matt will reveal some strategies on how to become a billionaire in real estate, even though it may sound like a pipe dream to most! However, what most don't realize is that the very first practices of many real estate billionaires are doable for most individual investors. Listen to this episode and get to know the three most common ways real estate billionaires got their humble starts and where you can begin in case you want to walk in those billionaires' footsteps.    Are you ready?   Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. How to become a billionaire in real estate. That sounds like a pipe dream to most. But what most don't realize is that the very first practices of many real estate billionaires are doable for most individual investors. Even if you're short on capital and credit. I'll show you what I mean. You ready?

Let's go. Welcome to the all-new, epic real estate investing show. The longest running real estate investing podcast on the interwebs, your source for housing market. updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, epicorei.tv. If you want to make money in real estate, sit tight and stay tuned.

If you want to go far, share this with a friend. If you want to go fast, go to reiase.com. Here's Matt. All right, by the time we're done, you're going to know the three most common ways real estate billionaires got their humble starts and where you can begin in case you want to walk in those billionaire footsteps. Now, this was of interest to me because I just started watching the show undercover billionaire this past week, the one that featured Grant Cardone. And this is where he was dropped off in an unfamiliar city with nothing but a hundred bucks to his name. And his challenge was to build a million dollar business in 90 days. And there are two other billionaires featured on the show that are tasked with the same challenge.

There's Elaine Collati, a real estate developer in Los Angeles, and Monique Mosley, an entertainment entrepreneur. And during their show introductions, Monique said that most wealthy people inherit their wealth. And that stuck with me because I had actually heard the opposite all my years growing up. So I went to go check it out. I did my own fact check. And I found a 2019 study by WealthX.com that revealed just 13.1.3. 3% of billionaires inherited their total wealth, while a surprising 55.8% of the 2,604 worldwide billionaires were self-made. And it might not come as a surprise, but nearly 90% of ultra-high

net worth individuals got and maintain their wealth by investing in real estate. Now, granted, some high net worth individuals are more invested in real estate than others, but it turns out that real estate remains the most popular vehicle for wealth creation and preservation. For us, smear mortals, though, the question is, what lessons can we learn from how billionaires invest in real estate? Well, surprisingly, quite a bit. Sure, you might not be able to start with a multi-million dollar mansion or a private island, but if you can think like a billionaire and following their footsteps, more than half the battle has been won. And you will probably find it encouraging that many of those billionaires started out without the capital to self-fund real estate purchases or the credit

history to easily finance them. And coincidentally, that's something that I'm going to be doing this month with a small group of aspiring investors, helping them get their first deal with minimal capital or credit. And they're all going to do it in 10 days or less, guaranteed. If you'd like to join us, get the details at the legends challenge.com. So the very first practices of many real estate billionaires are doable for most individual investors. I mean, if you run a business, own your own residence or even have a tenant already, you're miles ahead of most Americans. So let's go over the three ways that real estate billionaires got started in real estate and then highlight how you can too.

So the first one is office buildings. You know, while many real estate billionaires got rich in residential real estate, which I'll cover later, plenty of them used office space to get rich. Donald Brennan, with a net worth of $16.2 billion. Edward Roski, $6.1 billion. John Sabrotto, $6.1 billion. and Ted Lerner, $4.7 billion, all owe at least part of their fortune to office buildings. Now, of course, there is a greater barrier to entry in buying office buildings than residential housing,

but the management is easier and growth potential is much higher. And once you get a few office buildings going and have a reliable rent role, it's easier to keep investing in new properties. The growth becomes much, much easier. Now, the clearest path to success here is if you're already a business owner, because it makes sense for most business owners to own their buildings and then segment the office space out and start renting out portions of it. Because every dollar that you're paid in rent is a dollar that you don't have to take away from your business. And if you have a business that makes enough to support the rent payments, you can leverage that cash flow to buy more office properties.

Now, number two, fixer uppers. Sam Zell managed 4,000 apartments when he graduated from college. And out of those 4,000, he owned at least 100 of them. and he and a friend, they started out by just managing the students' apartments, but quickly learned the trade and started buying rundown houses to fix up and rent to students themselves. Now, this was back in the 60s. Nowadays, if you hear the word fixer-upper, you're probably thinking of house flipping. Now, house flipping is notoriously fickle, and not many real estate billionaires did it for long,

or even at all. Fixing up houses to rent to students, however, works out much better. You could even potentially rent out part of a property while working on a different unit. After the house is fixed up and you have a rent history on it, it will likely be worth more, even in a down market because of the ability to appraise using the income approach, of which will give you the ability to refinance money out to buy your next property. But personally, if I'm going to flip a property, I prefer to do it without the fixing part. I mean, it's easier, it's faster, and of less risk.

And that's exactly what I and a small group of aspiring investors will be getting together to do this month. I'll be working side by side with them. And each of us will get a deal done in 10 days or less. And if you'd like to join us and get one done yourself, you can get the details at the Legends Challenge.com. We'd love to have you. Number three, affordable housing. Stephen Ross has a net worth of around $8.3 billion.

He founded related companies, which has invested in over $600 billion worth of real estate over the past 50 years. And Ross is also a majority owner of the NFL's Miami Dolphins. and Ross started in real estate investing with affordable housing in 1972, and he mastered the art of developing and leasing housing that was subsidized by the government. By the 1980s, he owned multiple high-rise towers in several cities and had diversified into mortgage financing and property management. Affordable housing, it's often the first foray real estate investors make into the market.

Government tax credits are available to properties that lease a percentage of their holdings to people with low income, seniors or people with disabilities, students, military members and rehab or reentry program participants. While Ross took advantage of the tax credits by setting aside a percent of each property for affordable housing, smaller individual investors can start in affordable housing with programs like Section 8 housing. The Section 8 housing program pays about 70 percent of the rent for tenants in the program, and that amount is directly deposited into your bank account each month on time.

The catch is that you'll have to follow the government guidelines to a T. You'll also have to pass an inspection before the unit can be rented. Nothing big, but it is something extra to do. So how to get started? Well, for these real estate billionaires, the type of real estate investing wasn't as important as getting started, doing it well and compounding profits with new investments. And each of them had some level of expertise in their chosen area that gave them an edge. You know, for Stephen Ross, it was tax credits. For Sam Zelp, it was fixing up houses. So figure out where your own circle of competence is. And then start there. And if you need some help,

Figuring, the Legends Challenge might make sense for you. So to really play the billionaire real estate game, I've learned these four lessons from one personally. Lesson one, focus on off-market deals. They don't play much in the retail marketplace where competition drives up the prices. Lesson two, use other people's money, even when you have your own.

Despite how much the billionaire makes, they always opt for using someone else's money to buy their real estate. And in our RIAs program, we do the saying. we give our private clients access to our lending network, where 100% financing is available for many types of deals. Now, lesson three, maximize the tax breaks. One of the many advantages of investing in real estate is that the federal government will give owners credit on their mortgages, property expenses, property taxes, and the depreciation

of the property. And the first step to maximizing the tax breaks is to set up the right business structure. And if you're ready to do that, I've partnered with an expert that can answer all of your questions, give you some suggestions, and even set up your business structure for you if you want, for free even. I mean, you'll just have to pay the state filing fees and a small admin fee, and then you can consider it done. Go to freeentity.com for the details. Now, lesson four, preserve your wealth. You know, real estate has proven to be the best wealth creator during the best of times and the best wealth preserver during the worst of times. Given these facts,

billionaires use their real estate holdings to help secure their wealth and, to make sure it can be passed on for generations to come. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them and ask them to click the subscribe button

when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings, and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know home world, we got cash low. This podcast is a part of the C-suite radio network.

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