All Forum Posts by: Rick Howell

It’s the classic move up dilemma: Which should you do first, buy the new home or sell the old one? The way you work through that problem will depend on your finances and on local market conditions.

You would be able to sell the house in a world made perfect for the home buyer, but make the deal contingent on your finding a suitable replacement home. In a strong seller’s market where there are many more buyers than homes available for sale then you may get away with it – the current reality of most markets, however, is that they are buyer’s market. So, be sure to get the contingency clause into the sales contract before you sign your acceptance.

Ideally, on a buyer’s market, a better position is to sell first and buy second, which will give you some negotiating clout when purchasing the new home.

If you are in the situation where you need to buy before you sell your current home, you face a very real possibility of having to pay mortgages on both homes for a while… so make sure that you have room in your monthly budget that can can pull it off.

Among all the paperwork involved with taking out a mortgage, it is very easy to let your mind wander and simply sign on the dotted line. But be careful, you should read through the details of the loan.

You have to ask about, and also watch out for, these hazards to your financial health in particular. Although these are most commonly found in loans offered to borrowers with poor credit scores, these days they are being included in more loans marketed to borrowers with strong credit, particularly the newer ARMs (Adjustable Rate Mortgage) with ultra-low payments. You should be on the lookout for them in any type of mortgage.

Balloon Payments

Some ARMs are not scheduled to be paid off entirely by the end of the loan. They call for a final balloon payment which is usually a very large amount of unpaid principal. You are expected to refinance that balloon into a new loan, at whatever interest rate prevails at the time. When problems come with balloons, because the borrower’s situation has changed since taking out the loan. If a balloon comes due while you’re temporarily laid off then you’re in a tough situation. If you have a need for long-term financing like most homebuyers do then you should avoid balloons.

Negative Amortization

There is nothing positive to be said about negative amortization which is an increasingly common feature associated with ARMs. You’ll find it when interest rate is not capped but the payment is. Watch for the words “payment caps” in the advertising, that’s your clue that the interest rate is probably not capped. The interest rate may, indeed, rise faster than your capped payment. If that happens the unpaid interest is added to your principal balance. You end up borrowing more money instead of paying off the loan. Imagine borrowing against your credit card to make your mortgage payment each month. That insanity comes close to what you’re doing with a negative-amortization loan. Unless home prices continue to rise strongly – and you cannot bet on that continuing – you could end up having to write a check for tens of thousands when you sell the home, a prospect that could keep you trapped there when you’d prefer to move on.

Individuals seeking passive income often choose real estate investing. However, there is more than one way to achieve this goal. Discover the strategy and level of passive income in real estate that is right for you.

Passive Income & Real Estate Investing

One of the most common reasons that thousands turn to the real estate world is passive income. There are, however, substantial differences in how passive that income really is; and each investor may have differences in their aspirations, goals, and capacity. While some desire a little extra leverage and help in speeding up wealth their wealth portfolio, others simply desire to have their money working for good returns. There is also the genre seeking financial freedom and the 100% passive income that can empower them to retire.

All types of real estate investing, in some way, offer some form of ‘passive income’. From owning a real estate business to buying and holding properties to private lending, these methods may all offer the ability to leverage others. This includes other people’s money, other people’s time, and the forces of the market. Although, when most people talk about passive income investing in real estate, they are referring to buying and operating rental properties.

Becoming a Landlord

Most people become a DIY landlord as they step into this process, bringing the power of appreciation on their side. Tenants pay off their properties and put cash in their pockets every month. Depending how you set up property management and the business of acquisitions and trading properties will determine how passive this income really is. In reality, being a DIY property manager and landlord can be a lot of work. It can mean constantly being on call, out in the field fixing units, and knocking on doors for rent. If you work smart, you may land tenants that pay 6 months of rent or more in advance and never bother you. Well-screened tenants may pay their rent online and go out of their way to preserve your investment properties. However, you never know what you will get.

Professional Property Management Rentals

Landlords that enroll the help of professional third party property managers can take their investing and passive income up to a new level. Most times, good property management companies will more than pay for themselves, too. Having a management company handle all the day to day tasks means the investor can simply kick back and collect their income, or focus on finding new income properties to buy. Graduating to this level is the goal of all rental property owners.

Private Lending

Private lending is another alternative to generating passive income from real estate, at least for those that have capital. This can be as intensive or hands free as investors like. The down side is not directly owning the property.

Real Estate Stocks

Real estate stocks, REITs, and crowdfunding campaigns are another option. While they may not offer investors the security of direct investment in bricks and mortar, diversification from other assets, or the ability to control the value of their assets, it can potentially be a vehicle of passive income.

Own a Real Estate Business

Perhaps you aren’t a big fan of buying and holding rentals. Maybe flipping houses, wholesaling, or another niche stands out to you more. Owning a real estate business which engages in these activities may be an alternative solution. Some of the most famous billionaire real estate investors are owners of real estate companies; such as Sam Zell, Donald Trump, and Warren Buffett. The money may not be passive at first, but with time you could build a dynasty that pays off for generations.

Summary

There are many different ways to engage in real estate investing for individuals seeking passive income. For some, it is about personal preference. For others, it is graduating and climbing up the ladder as they build on their successes. Which is right for you?

What can we learn from New York’s biggest multifamily property deals that teach real estate investors about the market?

A new report from Property Shark reveals the biggest multifamily property transactions in NYC over the last 12 months. The top ten were all in the $100 million plus range. Here are the important takeaways all real estate investors learn from this data:

1. Income Property is Hot: The big multifamily deals changing hands in 2015 dwarfed even the biggest single-family, condo, and co-op sales in terms of dollars. The demand for income property investments and income producing rentals is massive. Low interest rate fears and other types of assets failing to perform this year are driving sellers to take advantage of the opportune time to sell. Now is the time for buyers to seize the moment and lock in great yields with solid protection.

2. The Big, Smart Money is Bullish on Real Estate: NYC’s big buyers represent some of the wealthiest organizations and individuals on the planet. They are extremely bullish on real estate, now, and for the future. They aren’t just making big bets either.

3. Serious Real Estate Investors Use LLCs: While brand new investors often try to bargain and justify reasons for not using LLCs or other forms of incorporation, all of New York’s biggest are virtually done in the name of LLCs. Serious investors do this for collaborating in partnerships, enjoying more privacy, legal protections, and likely to command better tax benefits.

4. Big Deals Offer Big Branding Benefits: For many, bold real estate deals are as much about branding as anything else. What may seem like paying crazy sums for properties to others, consistently elevates the visibility and brand of both financial firms and real estate deal makers. Those involved in making these deals happen are the new celebrities of today. Their plays help draw more business and boost their personal value. Having purchased, or brokered the most expensive or desirable property in the city is certainly a highlight on a resume that won’t soon be forgotten.

5. You Aren’t Thinking Big Enough: The biggest multifamily property deal in New York in 2016 was a combination of two communities, totaling 56 apartment buildings. The purchase by Blackstone topped $5 billion. The top ten were all $100 million plus. The cheapest in the top 20 still topped $60 million. Even more impressive were the spreads made on some of the big ‘flips,’ some which had been purchased in the low tens of millions just a few years ago.

6. $200 Million is the New Trendy Price Tag: After Blackstone’s massive multi-billion dollar purchase, the next largest was just shy of $200 million. Another, which had been expected to go for $200 million, sold for a little over $160 million. In other news, Hugh Heffner recently put the Playboy mansion up for sale for $200 million. While few properties of any type will sell for more than this in the near future, the bar has certainly been raised.

7. Online Reviews Matter: Try looking up the addresses of previous year’s big multifamily deals and you’ll often find reviews of buildings and property management companies. Not only will future buyers, lenders, regulators, and potential partners see these reviews, but so will potential tenants. Curate and handle online reviews well, or they could significantly impact your real estate investment performance and potential. In fact, more may need to step back and create systems and standards tondeliver superior service, which breeds great reviews from the start.

Summary

The big deals of the last 12 months provide some great learning points for all investors. It’s time to think bigger, think ahead, use entities for protection, deliver better service, and beef up your brand. Master these items and you could find profits well beyond you goals.

Are you ready to boost your house flipping returns this year?

Whether investors have written out New Year’s resolutions or annual goals, virtually everyone has aspirations to make more money in 2018. However, wishing alone isn’t going to get house flippers to new highs. So what practical and tangible plans can real estate investors engage to ensure the next 12 months are even better than the last?

1. Boost Your Deal Volume: One way to increase your earnings is simply to scale the number of houses you flip each year. Of course, that is easier said than done. Many would argue that if they could, they already would have. There are a number of real estate pros out there flipping over 100 properties each year. Some don’t feel they need to commit to that many. However, if you are flipping fewer than 10 per month, you definitely have room to grow. Implementing workflow systems and hiring assistance can make a significant difference, freeing your time and energy. Perhaps, most importantly, is reverse engineering the math on leads and marketing. How many leads do you need to reach your goal number of deals closed? How much marketing is it going to take to get that many leads?

2. Achieve a better ROI on Real Estate Marketing & Lead Generation: Achieving a better ROI when it comes to cost per lead and cost per deal can dramatically increase net earnings. These figures can often be in the hundreds of dollars. When you are talking about 100 deals a year, that is thousands of dollars a year. Improve these metrics with better targeting, better quality marketing, honing your content and branding, and, in turn, reaching your target audience.

3. Demand Higher Per Deal Spread investsor who would rather not handle more deals or cannot bring themselves to delegate and scale, demand more profit on each deal. Maybe you’ll set a percentage or dollar figure goal that you’ll start tacking onto each deal. Keep on nudging that figure up each year. This can be achieved by demanding better discounts on the front end, or pushing the limits on the back end.

4. Perfect Your Math: Improve your accuracy in due diligence and renovation budgets. The more accurate you are in estimates and executing on budget, the higher your total and net gains will be for the year. This is an area that often derails many investors. Don’t let this happen to you. Use checklists, adopt systems, hold vendors accountable, and better prepare for the unexpected.

5. Reduce Hold Times: The faster properties are flipped, the less risk there is, the less profit burned in holding costs, and the more deals that can be done each year. Speed this up with crews that work faster, getting a head start on rehabbing and marketing, and look for additional ways to pre-sell deals before you even close.

6. Slash the Fees: In his new book, Money, Tony Robbins hones in on the impact of fees and how much they can deteriorate net gains and growth as well as the hundreds of thousands they can potentially rob investors of over the long run. Be on the lookout for ways to reduce and slash fees. Investors pay plenty of them in different forms. Negotiate discounts with all vendors from appraisers and escrow agents to insurance agents to mortgage lenders and realtors. Push back on bank fees, office fees, and more. Ask. Be serious about directing your business for the best deal, and look for creative options such as joint ventures.

7. Cut Taxes: Taxes can take a huge bite out of all the income and wealth generated by investors. How much you really net depends on how much in taxes you’ll pay. This is where you have an edge and can keep tens of thousands more than your competitors. Those are important dollars that can make a massive difference in the long run. Look for all the breaks you can get and invest in a good tax professional to create an annual plan for you.

Happy house flipping!

Where is the biggest need for disruption in the real estate industry in 2016?

Dozens of real estate startups are still trying to innovate and ‘disrupt’ in the real estate industry. Most fail because the startup entrepreneurs come from outside of the industry, and really don’t get it. Many simply end up trying to reinvent the wheel, and end up creating a carbon copy of what is already there. Giant institutions keep gaining ground, even though they may not offer the best services. That hints at a larger problem: nobody is stepping in to challenge them. So where does the real estate business really need disrupting? Where are there real opportunities to improve the real estate scene?

The Biggest Issue in Real Estate

Not surprisingly, a lot of real estate investors are having problems working with reliable real estate agents. Of course there are great agents out there, but some are complaining that agents aren't cooperating. It's hard to argue with that. Not much else matters if eager buyers can't get through to listing agents. All the MLS mergers, online ad platforms, home search tools and apps in the world won't mean much if no one picks up the phone or answers email.

But once buyers and sellers get over this hurdle, there is a much bigger issue plaguing the industry: the real estate transaction process. Even though many are adopting digital signature tools, there is much that can be done streamline the transaction process.

The Flaws in the Real Estate Transaction Process

1. Too Many Steps: There are many, many steps and moving parts involved in purchasing and selling real estate. This creates numerous loopholes for parties to cancel contract and areas of stress and friction that can lead to transactions falling apart midway through. The outcome is making it tougher for others to buy and sell, and for realtors to survive, and provide a good service. Even after a contract is signed, there are loan applications to dealt with, loan conditions to be met, inspections to be done, and often condo or HOA approvals also needed.

2. Lack of Clarity: All the steps involved in selling and buying a property are only made more difficult by the lack of clarity and systems. Even many veteran companies and individuals who have been in the business for years appear to lack a set workflow and guidance for their clients. Maybe they haven’t nailed it either, or maybe they forget just how confusing and bewildering the process is. There are lots of home buying process articles online, but it appears that few professionals really lay out the steps and prepare their clients for what’s coming, and what they need to do to ensure a successful transaction.

3. Lack of Organization: There are many different parties and companies involved in most real estate transactions, and they all have their own agenda, style, and interests. There are inspectors, appraisers, underwriters, loan officers, processors, multiple realtors, brokers, neighbors, title company reps, underwriters, association boards and property managers. Getting this many companies and individuals to get along and work in synergy for one single experience and closing is no small feat. It takes a strong conductor to direct all of these players and instruments in harmony. Who is going to lead? Is it your realtor, the title company, you, or your loan officer?

4. Competition & Choice: We’ve been taught monopolies are bad for us. At the same time, the choices and competitiveness in this industry can add to the confusion, and often lead to more misleading information. It’s up to you to make the choices clear for buyers and sellers. Serve as their trusted, go-to source for deals, and remove any doubt from their minds. Never give anyone a reason to doubt working with you.

5. Mortgage Conditions: Mortgage underwriting conditions remain to be one of the most confusing parts of any transaction. Underwriters, and their lenders no doubt, have data based reasons for all that they request. Yet, borrowers are poorly prepared for the process, what they'll be asked for, why, and what they should turn in. What should be in a ‘CPA letter,' or how should gift funds be documented? How do you get a hold of your past tax returns when the IRS transcription service is down for two weeks, and local tax offices have stopped taking phone calls or providing copies? What if it is going to take three weeks to get a copy of your divorce decree, or a month to wait on HOA approval? This leaves much to be desired for streamlining the process and preparing buyers.

As we roll into 2018, investors are spending more time thinking of ways to get ahead. Some have already taken time out to reflect on the past year, and to set New Year’s resolutions. Others may not have put their plans to paper yet, and are still trying to find the time to think, or hone their ideas. So what are some of the critical thoughts real estate investors should be spending time on this month?

1. The Right Amount of Debt

What is the optimal amount of debt leverage to carry this year, and to roll into 2018 with? Real estate investors often sell themselves on putting off paying consumer debt. They often find it hard to justify when they make so much more investing in real estate. However, that debt can be unsustainable in leaner times. This could be the year to cancel that debt, and ensure your financial freedom sooner. Invest in real estate first, but use the proceeds to wipe out that debt. It may not be quite as attractive, but if you’ve still got credit card balances at 20% interest, and a car loan at 9%, you’ll at least guarantee those level of returns by paying it off. Then you’ll have more to invest in real estate each year moving forward.

For many, 2018 is the year to stretch and use more leverage to acquire income producing assets. Interest rates continue to rise, and it is a critical time for locking in low, long term rates on your dream home and rental properties.

So where do you want to be by this time next year? Most importantly, how are you going to make this happen?

2. Increasing Income

There are only two ways to create more financial surplus: reduce debt and expenses and increase income. There is only so much that can be done to reduce the outflow. So how will you increase your income this year? Investing in real estate is a great way to hack time and the system to generate an over-sized income. However, what if you can’t afford to ditch your day job yet, or are already working in real estate?

To earn more this year, you’ll need leverage. This may be financial leverage to acquire more property, or leveraging the time and expertise of others. This can be done through acquiring turnkey rental properties for passive income, or building a team. Maximize your time by only working on those tasks that provide the largest hourly return. What are those items for you?

3. What’s Most Important?

What is your reason for investing in real estate? What is the real goal and desired result? Don’t get lost in the metrics along the way. If it’s providing a great life for your kids, don’t neglect that now for the sake of hoping to give them more money later. If it is to ‘change the world,’ how are you working towards that goal each month? Remember what is most important. Keep it visible. Each day and year can be a success if you make progress on the one thing that is most important to you. It doesn’t matter if that is starting with 5 push-ups a day to be healthier, spending an hour with someone you love, buying someone lunch or a coffee, or making an offer on a new property. Schedule it on your calendar and follow through with action.

4. Legacy

If leaving a financial legacy is high on your priority list, give some thought to how you are making it happen. Making lots of money through real estate can really help. So is making sure that legacy is conveyed effectively and easily to those you want to benefit from it. Is your real estate portfolio easy to manage? What have you done to ensure a smooth transition to beneficiaries? Are they aware they should be looking for something? How have you prepared them to effectively harness the inheritance?

5. Taxes

Whether your big goals this year are to reduce debt, increase income, compound your progress in building a legacy, or create more free time; taxes are going to play a big role in how easily you reach those goals. Minimizing taxes is going to take a detailed plan and budget by the month. Do you have one yet?

What innovations and technology will impact the industry this year? How will fluctuations in the economy play a role? What about housing trends? What will you work on next?

What are real estate consumers thinking about in 2016?

There is significant contrast in how homebuyers, sellers, investors, and industry workers see the real estate market. In fact, there may have never been more diversity in recent history. So what are they thinking, and how will it impact the market?

The following represent the 5 real estate mindsets I am aware of in today’s market:

1. All About the Money

Recent criticism of Fannie Mae’s more lenient loan programs and pressure on lenders to make more aggressive loans is giving some a flashback to the party days of subprime lending. Some are fully aware of the dangers of wildly fueling the market and the potential costs to taxpayers, but they don’t care, as long as they make buckets of money in the meantime. This applies to investors, home buyers, industry workers, and companies. Those that really understand the market will be enjoying the ride for what it is, and stashing some of their new riches away for later.

2. Obliviously Bullish

Optimism is good. Yet, in contrast to the above, this group doesn’t even see the risk. They may not have experienced the crises of the early 2000s, or know their real estate history. There is nothing wrong with being bullish, and taking full advantage of the current market opportunities. However, to blindly believe that “things are different this time” may not be realistic either. There is money to be made in all market phases, but those that aren’t prepared to operate as the market heats up aren’t going to enjoy a long run.

3. Recovered, Insulated, and a Lack of Compassion

Some have posted online that they have fully recovered from 2008, have insulated themselves against any negativity in markets, and don’t have any empathy for those that may make real estate investment mistakes. They have positioned themselves well with passive income producing property portfolios, have diversified their assets, and are happy as long as their own finances are covered.

4. Still Scrambling, and on the Verge of Panic

Others say they still haven’t recovered from the economic roller coaster of the last couple decades. They are still barely making ends meet. The thought of a new economic downturn that might lead to a tougher job market, uneven home prices, and plunging stock values has them on the verge of panic. Many in this group would find that they would greatly benefit from real estate investment. Some will capitalize on the chance to wholesale and flip houses to catapult their finances for the better. Some will invest. Others won’t.

5. Confidently Embracing the Future

There is another group; they may or may not have been in real estate through the previous ups and downs. Either way, they are sensibly and optimistically working on growing their investments, finances, and legacy. They are not going to let today’s great real estate opportunities slip away from them. And no matter what is ahead, they are setting themselves up to weather it smoothly, and are confident they can reinvent themselves as needed to keep up, and stay ahead. Many in this last group are also vigorously embracing the sharing economy, and are happy to share their knowledge, experience, and success with others.

Summary

There is quite a diverse set of views among those out there in the market today. There is much potential for all of them to do well in real estate over the next few years. Some may not be helping the market, or themselves, in the long run. Others won’t embrace action enough in 2016, and will pay the price for years. Then there are those that will make great traction this year, and will invest well. Eventually this last group may even grow to become the next generation of real estate coaches, inspirational leaders, and billionaires. Whichever group you fall into, it is good to be aware of the mindset of the others out there. And while not everyone needs to think the same, understanding the others can help everyone create more win-wins.

Ready to unleash a powerful stream of real estate blogs to drum up business this year?

Real estate blogging remains one of the most important and valuable tools available to investors, agents, and industry businesses. But what do you blog about? It can be a challenge just to consistently come up with topics and title ideas. So here are 60 ideas for spurring your real estate blogging efforts, and ensuring a great start to the New Year:

1. Your local real estate market forecast for 2018
2. Comment on how higher interest rates will impact local sellers, buyers, and investors
3. How the economy will impact the real estate market this year
4. Your plans and new announcements for 2018
5. A call for readers to join you on social media networks
6. Announce a new email newsletter, and issue a call to sign up
7. Market statistics and updated data
8. The attraction of homes as Valentine’s Day gifts
9. How to use real estate to minimize taxes ahead of April filing deadline
10. The process of purchasing a home
11. The process of selling a home
12. Best local restaurants
13. Best local coffee shops
14. Best local interior designers and furniture stores
15. Top things to do in the area
16. Upcoming local events
17. Top local Twitter accounts to follow
18. Smart home tech for homeowners to add to their properties
19. Top property developments of 2018
20. A recap of your best real estate blog posts of last year
21. A call for those seeking referrals to reach out to you, and vice versa
22. Contact information and local resources for those moving into the area
23. The best rated, and top reviewed local moving companies
24. Coverage of celebrity real estate deals and listings
25. Tips for negotiating the best home loan deals
26. Types of real estate financing available
27. New loan program launches
28. Best home improvements for adding value
29. Positive social impact your company is contributing
30. Highlight local heroes and others doing good for the community
31. Announce a competition
32. Poll your Facebook followers and publish the results
33. Poll your LinkedIn contacts and publish the results
34. Cover local Easter events
35. Open house announcements
36. Announce an award and nominate someone for it, or ask for nominations
37. Highlight new team additions or strategic partnerships
38. Highlight any press and media mentions you receive
39. Resources for international buyers and investors
40. Your processes and systems, and what customers should expect
41. New software or tools you are adding this year
42. New real estate website features
43. Invite readers for a meetup to talk local real estate
44. Highlight new reviews and feedback you receive
45. A list of your favorite quotes
46. Create an infographic on market
47. History of your city
48. Profile different neighborhoods, communities, or condo buildings
49. Review of common architectural styles, and how they are changing
50. List of local companies that are hiring workers
51. Create a slide show of local artwork
52. Review local small businesses
53. Highlights of your best moments in real estate
54. Create a slide show of your favorite property listings or past deals
55. Thanks for reading your real estate blog
56. Introduce your blog team and their stories
57. Your backstory and why you got into real estate
58. Roundup of the latest news stories
59. How to move up from renter to homeowner
60. Wealth building and real estate investment tips

There is plenty to blog about. If you blog daily, this list ought to keep you going for the next couple of months. If you publish less often, it will last you even longer. Need more ideas, or the time to write them? Consider hiring a copywriter, and potentially an assistant to upload and publish your posts consistently. Don't underestimate the power and importance of content marketing and blogging for your business in 2018. It can take some thought and investment, but the results will have an ROI that is well worth the time and effort.

What will you blog about this year?

Statistics show that there is big business in high-end home flipping. Who is breaking the misconceptions about flipping houses? What are they doing differently? How can more individual investors reap multi-million dollar rewards like those operating at the top of the market?

Flipping Houses Isn’t Just for the Little Guy

Even though wholesaling and fixing and flipping houses remains an easy entry point into real estate, new data shows that a new investment strategy is increasingly being used by the ultra-wealthy. Wholesaling and rehabbing houses can certainly still be used by those who are starting out, but transaction records show that these investment strategies are being used by those that already have millions in the bank. This provides evidence for those questioning whether flipping houses was just a short term amateur strategy, or a sustainable long term investment vehicle.

Celebrity Home Flips

Numerous celebrities have turned to flipping houses to supplement their already massive income. This does not just include reality TV either; A-listers like Ellen, Jennifer Anniston, and others are joining the trend. Then there are those which may have suddenly found themselves in this industry (or on purpose flippers), like Kanye West and Kim Kardashian. They are making hundreds of thousands, millions, and even over ten million a pop. Even the media has picked up on several of these large deals in California.

Fund Managers and High Level Executives

Hedge fund managers and CEOs seem to be interested in flipping high-end homes as well. Even though they are best known for running media companies, picking stocks, mergers and acquisitions, and juggling other people’s money in the market, public record data shows many of these financial gurus are making a lot of their personal money from flipping houses, condos, and co-ops in New York City. New data from Property Shark shows that many flipped or bought homes with $10 million profit markups. Others scored multi-million dollar discounts, and some immediately put properties in the tens of millions of dollars range immediately back on the market after buying them. Also, there are those that have bought into some of the most expensive new developments to be built with the anticipation of flipping them for big money. When you see the family members of famous rock stars, heads of the top private equity firms, and others engaging in this type of investment, few would think they need the money. Often times they do it for fun, and for bragging rights at the dinner table. Others are certainly doing it to multiply their wealth and move up the rankings lists, all while building a strong income plan for when they are retired from their corner office positions.

Commercial Real Estate

It seems that paying tens or hundreds of millions for a property isn’t a big deal in the commercial real estate arena. Manhattan and Brooklyn retail and multifamily properties sell for this much on a regular basis. Sometimes value is added by the market itself; other times it is in securing new long term tenants. Yet, for others, it is strategically piecing together several parcels to create a bigger footprint on which to build a dramatic new complex. The bottomline is that it is all a form of flipping, but at the very top of the game.

How do the Wealthy Flip Differently?

There are a number of ways that high-end flippers do things differently than those just starting out and there is much to learn from them:

• Use partners to pool capital together
• Use realtors and property managers
• Use the best designers when rehabbing properties
• Work off-market and let buyers seek them out
• Seek prime properties in the best locations, versus just what is cheapest
• Use LLCs for privacy and protection

How to Join in the Success

Whether you are starting with nothing, or with billions, there is a lot that individual investors can do to participate in this type of success. It starts with learning and real estate education. There are clearly a number of factors which can be adopted by the most successful, as listed above. Perhaps the most important place to start is to adapt the right mind set that flipping and wholesaling properties is an investment tool that is equally for professionals and billionaires for the long term, as it is for those just trying to catch up.