How to Real Estate Investors acquire thousands of properties overtime?

Question

I have read about people who started real estate investing with very little money and now own hundreds of properties.Last week i was reading about a landlord who owns over 1500 rental apartments,20 years ago he was almost bankrupt and now he owns 1500 rental apartments..what strategy do they use to acquire such huge number of properties?I know they borrow alot of money at the beginning but still what exact strategy/ways these guys do this?Thanks :)

Steve L. · Answer

Everyone starts by putting one step in front of the other.  The journey may be different but it always starts by buying one property at a time, improving it, leveraging it and moving to the next one.  Before you know it you are buying small apartments, than big apartments.

Jon Holdman · Answer

Syndication may let you get a lot of units, numerically.  But when you bring in other people and their money, you're giving up returns.  That said, the management fees from a syndicate are sometimes the ONLY money being made.  Ask me about a mini-storage I'm stuck in!

What's the biggest key?  Spend less than you make.  Whether you're making $10 an hour or have a $200K a year job, you have to spend less than you make.  Save the difference and invest it.  Buy good investments (tough to do 100% of the time) and roll the returns back into your portfolio.  Over time, it will begin to snowball.

Rich Weese · Answer

Steve L- pretty simple answer and imo, 100% correct.

Vaisha- Owning 1500 apts is impressive, but very doable. My first broker/mentor told me to have a goal of being 1 million dollars in debt and make 10% on the money. 100K per year. Very simple in the 1970's and a WHOLE lot of money!

Times change. You better be flexible and not a one trick pony or you don't have a chance. Things are always changing and in flux- you need to be also. Rich

Geoffrey Murphy · Answer

Rich-

Shouldnt of used the word preached! haha

I agree pretty much with all of you above.

GM

Rich Weese · Answer

Jon- too narrow of a question. I was young, in my 20's with NOTHING to lose and time on my side. If I was that young, yes, I'd say to do it.  However, as you get older and have significant assets to lose and less time to re-group from losses, more cautiosness needed imo. At my current stage and concern about the U.S economy and future, I'm looking to preserve and protect what I have and incur little risk of huge loss. I hope that answers it. Rich

Bill Gulley · Answer

I like that Rich! So true, seems like 90% of those starting out think by learning that one trick will make them wealthy. A one trick pony, LOL!

I'd find it hard to beleive that anyone who has been successful in RE got that way by doing one thing over and over again, I know there are many who failed doing that.

Jon Klaus · Answer

Rich Weese would you pass on that early advice you got, but update it?  Get $10mm in debt and earn 10% on it?  It may not get you to 1500 units, but a few hundred, possible.

Rich Weese · Answer

Jon- Just like flipping is no guarantee you'll be successful, neither is Syndication. Sounds like you got in a bad structure from the beginning. Depends on which side you're on as to whether you give up returns in a syndication. It is a great way for those who don't want to be involved in actively overseeing RE but want to invest. Mgmt fees coming out first is never a great idea, imo. I love my storage facility.

I do agree with your 2nd paragraph.

Geoffrey- Not sure I ever "preached" syndication, but it was certainly a great vehicle for me in the 70's-80's. Just one of many methods I used and found successful. 
Rich

Geoffrey Murphy · Answer

You guys are all absolute right. My mentor that i've been working with for some years now, owns a little over 2,000 units. It just like everyone said, he started with one house, and then it turnt to four, then eight. ect.

However, one of the MAIN reasons/ways they are able to acquire so many units, is what @Rich Weese has been preching all along, SYNDICATION!

Ryan Moses · Answer

I don't think all of them borrow a lot when starting out.The one thing to do is to be patient and do lots of research and consult widely so as to make informed decisions.

How to Real Estate Investors acquire thousands of properties overtime?

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