What real estate strategy has created the most millionaires?
There are a lot of strategies that you can get involved in when investing in real estate. Some of them create cash upfront and that is appealing to a lot of people.
-Fix and flip
Then you can buy and hold different types of properties. You can buy and hold strip malls, hotels, office or medical buildings, industrial use properties etc.
But a lot of people are trying to figure out what the best way is to become a millionaire. Now, I’m not talking about having a million dollars cash in the bank. I am talking about having a net worth of a million dollars.
A lot of people start out with flipping or wholesaling properties. There’s nothing wrong with these strategies, and they are great for building capital that you can then use to invest in real estate. These strategies can help you get the seed capital, and if that’s what you want to do that’s fine! However, I have yet to find a wholesaler that has become a millionaire by wholesaling properties. And when you are flipping properties, when you sell a property its gone! No monthly cashflow. No long term appreciation. No long term benefit.
The strategy that I have found to be the most successful in creating millionaires is buying and holding real estate. This method creates monthly cashflow for you. It lets you benefit from the long term appreciation of your properties. You also benefit from the mortgage paydown if you have used debt to purchase the property (highly recommended to speed up the wealth creation process for investors).
And the best part is, these benefits are realized not from cash out of your own pocket, but from your tenants paying you rent! These 3 combined benefits act as a powerful means to create significant wealth.
After you have been at it for awhile and have enough properties, you can hire someone to look after the properties for you to let it become a little more passive for you.
But this takes time. It takes quite awhile to get to the point where you have a million dollars in net worth. Most people are looking for a get rich quick scheme so they aren’t interested in buying and holding real estate. It takes too long and its too much work for them.
However, if you are willing to put in the work and stick with it, you will create large amounts of wealth for yourself and it will be well worth it.
Again, if you need to do some of the other real estate strategies to build up some capital, that’s ok! But the real wealth building lies in long term buy and holds. You need to be able to create a monthly cashflow. When you can collect the monthly checks from your tenants, that’s real wealth. That’s what will build up your net worth.
And once the ball gets rolling, it will start building quickly! Your net worth will start growing exponentially once you get several properties in your porfolio.
Put in the time, put in the effort, and you will become a very wealthy person!