There are stories galore of self-made millionaires in real estate — ambitious individuals scrabbling together cash for their first property, working hard, hustling, staying sharp, and winding up with an expansive portfolio of properties and personal financial freedom.
Clever’s Co-Founder and CEO, Ben Mizes, is just one example of how rapidly one can achieve success with property investments. Ben bought his first multifamily unit at 23 and now owns 22 units and a real estate tech company.
If you have an entrepreneurial spirit and the drive to work hard, there’s nothing stopping you from investing in property and achieving this sort of success yourself.
And even if your goals aren’t quite so lofty as Ben’s, real estate investments are still an excellent way to generate passive wealth and increase your net worth. Property has a tangible, inherent value that appreciates reliably, and you don’t need a ton of cash to get started with investing.
However far you want to go as an investor, these tips from self-made real estate moguls will help you find the right properties to achieve success — whatever success means to you.
4. Get Involved in the Property Investment Scene
Nobody stumbles into success by accident. As Ben or any other self-made mogul would attest, you have to develop both your knowledge and your connections in whatever field you’re pursuing.
For real estate investors, that means you should keep up with industry blogs, investing podcasts, market-watch websites, and the like. If there’s any term or concept you don’t fully understand, study it! The more theory you feel comfortable with starting out, the easier it will be to avoid the common pitfalls and mistakes of amateur investors.
Next, start networking with other local investors and investment groups. This network should include people in ancillary real estate roles like agents, brokers, property managers, and even contractors — all people you’ll need to work with eventually. These connections will allow you to keep current with your local market and help you discover new opportunities you might otherwise never find on your own.
3. Learn How to Take Advantage of Leverage
When you first start out as an investor, you won’t have much capital to work with. But that’s okay! Everybody has to start somewhere, and real estate is a particularly ripe field in which to pick yourself up by your bootstraps.
The key to this process is leverage. Simply speaking, this means that you can amplify your potential return on investment (a property) by borrowing capital (a mortgage) to fund it. The trick here is that even if the bank owns most of your property, you have full control over its ability to generate wealth. So if you’re renting it out and getting a tenant to pay your mortgage, you’re passively growing equity having spent no more than the down payment.
The smartest investors are able to repeat this cycle in order to rapidly expand their portfolio. If you can turn one down payment into a wealth-generating asset, you can turn the gains from that asset into another (maybe bigger!) down payment — and so on ad infinitum.
Just remember that as your portfolio scales, so will the costs of managing and maintaining all those properties. You have to be prepared to grow your business accordingly, which brings us to:
2. Get to Know Every Step of the Investment Process
Ben’s advice for successfully growing your portfolio is deceptively simple: “Buy right, rehab right, manage right, finance right, and don’t give up.” These are the pillars of all real estate investments, and if any of them is weak, the whole investment could collapse.
Learning how to do all these things right is a process best learned with hands-on experience. Ben recommends jumping into every step of the investment process personally, to build a solid intuition for what works and what doesn’t.
To buy right, Ben built his own property investment spreadsheet. To rehab right, he learned how to swing a hammer and took on renovation work himself. To manage right, he played landlord with the help of a service that handled the grunt work of screening tenants and collecting rent. To finance right, he built good relationships with lenders. And most importantly, to become a mogul, he knew not to give up no matter how hard things got.
1. Work with an Experienced Real Estate Agent
Attaining financial freedom with property investments isn’t easy, but it is possible if you have a clear strategy for success and you’re willing to put in the work.
Luckily, it’s not a process you have to go through alone. If you’re ready to get started investing, you can get a big head start by connecting with an experienced real estate agent. A good agent with investment experience can not only help you figure out your investment goals and come up with a strategy to meet them but can find you properties and opportunities that you might not have access to on your own.
Clever Partner Agents are all top-rated agents in their local markets, and can even save you cash on your first property investment by returning $1,000 of the purchase price in the form of a Home Buyer Rebate.