Which strategy builds massive wealth the fastest?

[Account Closed]

I have either read on the forum or heard in the podcast that you choose your strategy based on your goal(s). I.e. Rentals create passive income and wealth in the long run vs. rehabbing which has large payoffs in a shorter amount of time but doesn't have the tax or appreciation benefits that buy and hold does. My question is which strategy builds massive wealth the fastest? I do not mean a get rich quick thing - for example I figure if you raise enough capital from investors and you keep your living expenses low, you can snowball your returns, with each year being able to flip more and more houses. You also have success stories like Lance Wakefield. And then you have the real estate billionaires which seem to be developers for the most part - so would real estate developing be the answer?

[Anthony Gayden]

Originally posted by @Account Closed:

I have either read on the forum or heard in the podcast that you choose your strategy based on your goal(s).

I.e. Rentals create passive income and wealth in the long run vs. rehabbing which has large payoffs in a shorter amount of time but doesn't have the tax or appreciation benefits that buy and hold does.

My question is which strategy builds massive wealth the fastest?

I do not mean a get rich quick thing - for example I figure if you raise enough capital from investors and you keep your living expenses low, you can snowball your returns, with each year being able to flip more and more houses.

You also have success stories like Lance Wakefield.

And then you have the real estate billionaires which seem to be developers for the most part - so would real estate developing be the answer?

 I am absolutely convinced that the best way to build wealth is a combination of the two methods.

After studying what the more experienced investors do to build wealth I saw a pattern.

They buy a property, usually at below appraised or market value. This means that when they close they have already made money.

They do work on the property to increase the property's value. They invest money so that the value increases far beyond the cost of doing the repairs. At this point flippers immediately cash out the gains by selling. This is great if you are trying to build up cash so that you can do bigger deals, but not the best for building long term wealth due to it being more hands on and the fact that you take a larger tax hit.

They look for cash flow. That cash flow covers all expenses and provides them with a return on their investment. They also buy in areas where they will get appreciation. The levels of appreciation will vary depending on location, but the wealthiest investors benefit from appreciation. The wealthier investors hold onto their investments for longer time periods.

They use money made from real estate investing to continue to invest. They use methods such as cash out refinances, HELOCS, and 1031 exchanges to draw out equity and appreciation gains in order to invest in more real estate without facing tax penalties.