‘How to become a millionaire’ in real estate investing is always the talk of the town, especially for beginner real estate investors who dream of overnight success and long lasting riches.
An overnight success is highly unlikely, but becoming rich and successful in real estate is definitely feasible and almost anyone can reap the financial perks of investing in real estate investments for a long time.
If you study the most successful real estate investors, you will see their success is an accumulation and a by-product of hard work and time invested over the years. The real estate market is less volatile than the stock market, and it boils down to capitalizing on real estate investments in good locations reaping you high cash flow and long term appreciation. This is the secret formula in a nutshell; keep it in mind when you make decisions regarding your real estate investments. But this does not mean there is no risk in real estate; the biggest risk is buying a rental property and selling it for a significantly lower price due to market conditions, bad timing etc.
How to Become a Millionaire in Real Estate in 7 Steps
The fix and flip real estate strategy is your best bet
If you want to make money in real estate in the shortest time possible, then consider going with the fix and flip strategy. But don’t take this lightly because it is not easy and there is high risk on the line, especially if you are a beginner real estate investor. The experts have become fix and flip pros overtime and after a few failures, they learned how to find the best undervalued property, renovate it, and sell it for a much bigger profit margin. Long story short, if you plan to become a millionaire like most successful real estate investors, a fix and flip real estate strategy is a stepping stone to riches in this case. If you want to know how to become a millionaire through the fix and flip rental strategy, click here to find out more.
Taking on higher risk reaps investors greater returns
In all cases, risk cannot be avoided and you cannot invest in anything without incurring some level of risk in your path. But when it comes to real estate risk, it is primarily on the low end of the spectrum and not as volatile and unstable as the stock market. This is the reason why so many people choose real estate over other risky ventures.
With this said, however, the more risk you take on, the greater returns you will incur and the more money you will make from your real estate investments. Another key metric for ‘how to become a millionaire’ in real estate depends on the investor’s willingness to take on more risk than other investors. The more risk-averse you are as an investor, the less real estate opportunity for greater ROI and big cash flow returns will come your way.
An example of taking on a big risk in real estate is buying a real estate investment in an area that has good potential for growth down the line but not in the present moment. It might take years for you to see growth and return on investment. But this is the risk you are willing to take on for potentially big financial rewards in a few years time. Another risk is buying real estate investments for capitalizing on long term appreciation and incurring negative cash flow returns in the short term. Investors who invest for appreciation take on big risk because they may or may not make money down the line as opposed to investing for cash flow. If you want to learn more about the different dynamic between investing for cash flow vs. accumulated appreciation, click here for more insight.
Portfolio diversification is the key to multiply your returns and mitigate your real estate risk
In tandem to the previous point, how to become a millionaire in real estate boils down to your real estate investment portfolio. Diversifying your risk and multiplying your returns is the crux of having a real estate portfolio. To make real money in real estate, it goes without saying that you must invest in more than one rental property, and instead strategize your real estate investments in prime locations to reap the highest returns and financial rewards. Successful real estate investors don’t limit their profit quota to the US housing market alone; they also look into investing outside the States in prime cities across the globe to make millions.
Related: Diversified Investments in Real Estate- A Basic Guide
Get real advice from experts and professionals
Getting professional advice from real estate professionals and advisors accelerates your learning and helps you make fewer mistakes in less time. It goes without saying that this point is crucial if you want to know how to become a millionaire in real estate in less time. With real estate experts on your side, you shorten your path to real estate riches by cutting corners and taking detours that not only save you money but make you money faster. This rule is conditional on the fact that the advisor and mentor knows what he/she is talking about and actually helps you make smarter decisions to grow your business and not vise versa. In a nutshell, be very careful about who you choose to be your real estate mentor/advisor.
Get real estate educated and stay on a steep learning curve
How to become a millionaire in real estate depends on your learning curve. Never stop learning, always read up on real estate blogs to stay informed on making smart decisions to grow your real estate business. In this day and age, the only constant is change and if you don’t keep up, you might miss real estate opportunities that could have earned you millions. Also, keep in mind what worked a decade ago may not work today, so staying on a steep learning curve is paramount to your real estate success.
Do your due diligence
How to become a millionaire does not happen on a whim. You don’t get lucky or wait for that winning lottery ticket to fall in your lap. In real estate, finding the most profitable real estate investments requires much due diligence in the form of market analysis and investment property analysis.
And thanks to technology, you don’t have to work hard and spend hours on making that spreadsheet. Websites like Mashvisor.com give you a thorough and streamlined real estate market analysis to help you hone in on the best profitable real estate investments in no time. Don’t believe us? Check it out for yourself here.
Related: Conducting Comparative Market Analysis: An Art or a Science?
Don’t discount commercial real estate
Besides traditional real estate investing, commercial real estate is a much bigger venture with higher risk, but reaps bigger rewards nevertheless. If you are advanced in your real estate career, don’t discount commercial real estate for bigger financial rewards. How to become a millionaire in real estate is about finding creative ways to invest and not limiting your opportunities.
Related: How to Make Money from Commercial Real Estate for Rent
How to become a millionaire in real estate has no roadmap; create your business plan and financial objectives and choose a real estate strategy that is aligned with your long term goal. Seek professional help and advice from real estate agents and real estate advisors to speed the process. And remember, success and riches don’t happen overnight. Plan accordingly to build a profitable real estate business from the ground up.
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