How can I use real estate investments to build wealth?

Build Wealth Through Real Estate
  1. Invest for the long haul. Don’t flip. Almost every flipper I have ever met with exception of a few contractors that had tremendous renovation resources and did it on the side, have ultimately declared bankruptcy at some point.
  2. Always invest at a minimum of a 15% cap rate. If you can’t find that in an acceptable neighborhood or community, look in another community. If the market is too high everywhere, wait for a correction and invest when the time is right.
  3. Only buy what you can manage well. If you can’t mange it well, don’t buy it. Don’t trust that a property manager will do everything perfectly.
  4. Make sure you buy properties and renovate them to attract great tenants.
  5. Get great at doing “real” numbers – not the numbers the realtors give you.
  6. Develop a stable of private investors that can move fast with you. Never miss a single payment to them. Never risk their capital. Always have your own money in the deal after theirs.
  7. Know what you can do and what you can’t do. Find someone who compliments you and is exceptional at what you’re not good at and hire them or make them your partner or some hybrid of the two.
  8. When prices get stupid wacky high – sell. Stupid wacky high is usually about a 5% cap rate. Move to cash and don’t invest a penny until the market corrects – it always does. Don’t carry financing for the crazy buyer that buys at those cap rates.
  9. Live below your means.
  10. Have a reserve.

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