Some best kept secrets of real estate millionaires

Abiodun Doherty

There are many ways of becoming a real estate millionaire. It is
possible to inherit lots of properties and thus become an instant
property millionaire. This is not the norm and although a few
people will experience this, several others will not experience
such a bequest.

We are interested in those who slowly and strategically built
wealth through real estate. We are even more interested in those
who have documented or shared their experiences so that we can
learn from them and apply their time-tested principles. We will
unpack a few of those lessons that we have learnt from this select
group.

Successful real estate investors are long term thinkers. They
have a long-term perspective when evaluating investments and when
planning their future. Many people think in short-time frames. Some
even think daily believing that any day apart from today is not
worth planning for.

If you want to be a real estate millionaire, you must start
thinking in at least a 10-year perspective. An area may look
unattractive today but what is the possibility in 10 or
twenty-years time? Real estate investment has proven to be one of
the most stable and rewarding long term investment vehicles even
after experiencing short periods of downturn.

Real estate millionaires often operate like bargain hunters in
other sectors of the economy. They love to buy properties when
others want to sell. They love to buy properties less than its
actual value. They love to buy distressed or discounted
properties.

The interesting thing about this is that they aim to start
making money on their property purchase from the start. When you
buy a property at a discount, you make an immediate gain and also
hedge yourself against any downturn in the market. It is a strategy
for ensuring that you are properly positioned to make more money
than the average investor the moment there is an upswing in the
market.

Someone once said that many look but only few truly see. In real
estate investment, this is very true. Experienced real estate
investors can see opportunities where many can see nothing but
problems.

This select group go out looking for strategic value that might
not be obvious to the property seller. A strategic advantage in a
property or piece of real estate could range from size to location
or design. A strategic advantage is anything that is unique to the
property that cannot be easily found or seen in any property in the
same location. A strategic advantage could be a key difference in
the property when compared to other ones that could make it a game
changer when unveiled.

Another secret of real estate millionaires worth noting is their
focus on investing in a tested market that has a long history of
capital growth and appreciation. Those with very little knowledge
of real estate investment often criticise or mock some investors
investing in some highbrow areas on the premise that the amount
they have invested or intend to invest in those areas could buy
several lands or build several houses in other places.

What is hidden to the critic is that although some areas are
very expensive today, they have a long history of capital growth
and will certainly grow in the future except something out of the
ordinary happens. These areas are tested markets where the demand
is always more than the supply. Some of these areas can only be
accessed by those with lots of money and the value will continue to
grow. Real estate millionaires always ensure that they have a
sizeable number of their properties in these areas.

Value can also be manufactured if you can see the possibility.
Many real estate millionaires have been created through this means
.The ability to look at a location or a property and see how to
create value from it has always been part of the secrets of real
estate millionaires.

This is one reason why refurbishing or renovating properties has
always been a means of making money for those who understand it. A
real estate investor could approach a property owner who has a
derelict property in a strategic location but has no money to
refurbish or rebuild it and offer to rebuild it for him or her on
clearly agreed terms. By the time the renovation is completed the
property is often distinctly different from what was there before.
The property can now easily command greater value.

Finally, astute real estate investors are good at using
leverage. Leverage is a means of maximising limited resources to
gain significant advantage. Leverage includes using a small savings
supported with proper documentation to raise money from the bank
that you then use to purchase a property which ordinarily you would
not have considered. However, if the property is sold, you’ll
benefit as if you had put down the entire purchase price. This
alone will boost the possibility of your making big money in real
estate.