The Millionaire’s Secret to Multiplying Wealth in Real Estate

Posted on Jan 16 2015 - 8:01pm by 2!xMyNQ#FV8h4U
Lance Edwards. President, First Cornerstone Group, LLC.

Lance Edwards, President, First Cornerstone Group, LLC.

Everything in real estate is about leverage. That’s why real estate creates more millionaires than any other asset or investment group because of leverage. What do I mean about leverage? Let’s talk about leverage in your time.

Most people approach real estate because they want to get into wholesaling houses. And that’s fine, that’s great. But, every day is a new day and they have to start from scratch every single day.

Let’s be more strategic with regards to this, and leverage your precious time because I know if you were like me, you are starting on a part-time basis.

Many people complain “I don’t have enough time” to get into real estate. “I don’t have enough time.” With all due respect, you do have the time but you are just non-strategic about your time.

In This Lesson, You Will Learn:

  • Why small apartments are a busy entrepreneur’s dream investment
  • How the rich build wealth in real estate without setting foot on these properties
  • The secret to multiplying your wealth with apartments, multi-family real estate

The Millionaire’s Time Strategy

One thing that got me started in small apartments is that apartments are valued based upon profit and loss rather than comps. When you have to evaluate a house, it is valued on comps, so there is a little bit of a subjective process. I liked the ability to evaluate an apartment deal based on the financials.

I could take a profit and loss statement and a rent roll, and I could evaluate any apartment deal across the country sight unseen. I could be making these deals at night without traveling. I don’t have to see it. And I could make offers from my kitchen table or home office across the country on apartment deals.

Evaluating an apartment is a lot like evaluating a business. It’s all based on the net operating income. The higher the NOI, the more it’s worth.

When I got started, I was basically working 60 hours a week in a high-demand job, and it was the kind of job where if I was missing my quarterly numbers, I got fired. I didn’t like that kind of risk to me and my family and that’s one of the reasons I was looking at real estate in the first place was to build my Plan B, and that is how I discovered apartments.

With apartments, you aren’t limited to your own back yard. You can choose any markets nationwide, and you will want to get to the point where you are choosing the hot markets. If you are going to build a business, you should build a business in an area that is in demand.

You’ve got apartments that are in demand, and you have markets that are in demand, so you need to focus on apartments in these hot markets. You can evaluate these apartments in these hot markets anywhere you have a fax machine and a computer. That’s what I mean by being strategic with your own time.

Scale Up: The Power to Multiply Your Money

The other thing about apartments and leveraging our every activity is you can scale up. You can start with small apartments, and then scale up to do lots of small apartments, or you can then scale up to do mid-sized to large-sized apartments. I have done deals with anywhere from three units to 300 units, and it’s all the same.

Very small apartments are a place for people to get started because they close fast, there are lots of buyers, the buyer groups are easily defined, and even if you want to buy one to hold on to, the money you have to raise is a relatively small amount. If you find one IRA investor, you are in business.

It’s that critical first deal we want to get you to, but once you start down this path, you’re leveraging everything that you do.

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