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Fastlane Path- Real Estate Vs. Starting a company

Discussion in 'The Fastlane' started by Tony I, Jul 2, 2013.

  1. Tony I
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    Tony I 100 kph Read The Millionaire Fastlane Speedway Pass

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    I have been fighting this question for a while; real estate investor, or start your own company.

    So I talked to Jaimie Tardy, the owner of the website Eventual Millionaire. She has interviewed over 100 millionaires, and claimed that most of them have done it through business ownership, not real estate.

    To me though, it seems like a lot of successful people that I know are real estate investors/developers. What is the typical time (fastlane process) to achieve financial freedom in Real Estate? Is it longer than the 3-7 year time period MJ gives for businesses? Can you do it as a younger person?



    I understand it is an hard question to answer, just wanted to get some different viewpoints on the subject.
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  2. Omerta
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    Omerta 70 kph Read The Millionaire Fastlane Speedway Pass

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    Both. I'd grow a business first and then invest with the less cash possible.
  3. socaldude
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    socaldude 170 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I would go with start your own company because its an asset that can easily be manipulated to a higher valuation compared to Real Estate. For example if my duplex is worth 200k, its very difficult to do some business work and make it worth 400k in a year without the real estate market(hope and time). Remember Asset Value and Net Income from TMF? This shit is a whole different ball game in Real Estate.

    Asset Value is dependent on the real estate market, you cannot control the real estate market. Net Income is dependent on fair market rental values that really don't change, you don't control that.

    Real estate is freaking fastlane if you deal with large numbers or values. If I am a developer and create a 50 unit apartment complex then yeah its freakin fastlane but if i buy a 1 unit apartment on main street and rent it out its kinda like saving $10 a week it get rich.

    It just depends.

    How much money do you have? How Good of a networker are you? I would say a good 10-20 years.


    With a business I can start one for 5k and sell it for 5 million in 5-10 years. You can't buy a duplex for 5k and sell it for 5 million in 5-10 years.
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  4. Stef
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    Stef PARKED

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    For a while there, I wanted to focus solely on Real Estate investing for getting me to a high net worth as well, but lately I've been thinking it's not fastlane enough. At least it won't be if you're trying to build it up from scratch with a low amount of money to start with.

    On the other hand, while a startup can get you there much faster and make you a lot richer, it's not that easy having the right idea and execution.

    In conclusion, Real Estate investing might not be as fastlane but it's more of a 'safe' thing than starting your own business. It's definitely not safe, but it's more simple, as in a proven model and you are more or less able to calculate risk. I'd choose a startup any day, partly because of the possible rewards, also because the journey is my idea of fun, but it's easier said than done.
  5. mapaul04
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    mapaul04 20 kph Read The Millionaire Fastlane

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    I would recommend starting a company. In my situation (and my situation at 19) it is far more likely that I could scale a company to generate millions of dollars.

    I had no money and no connections which based on my knowledge would be required to succeed quickly in Real Estate.

    You mention you know many successful developers so maybe your situation is different and maybe real estate is a good option for you.

    For me, not so much, my path would be to start a company generate revenue and in the future (2-3 years down the road) invest in real estate.
  6. mapaul04
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    mapaul04 20 kph Read The Millionaire Fastlane

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    I cant agree with this. After everything thats happend in the last few years I just cant believe this would be true. Granted right this second it might be a good time to start, I just prefer more control than real estate could offer so I would go with starting a business as more of a safe bet.
  7. Tony I
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    Tony I 100 kph Read The Millionaire Fastlane Speedway Pass

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    What about people who own numerous properties? Aren't there ways to use the equity from one property to buy additional ones? (Excuse my lack of knowledge, beginner in real estate.)

    I guess the thing that always makes me reconsider a start-up is the fact that a lot of entrepreneurs say they do it "because they love it", not because of the money. Like the book says, I only have the general passion for living life on my own terms and retiring young.
  8. socaldude
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    socaldude 170 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Yeah, there are lots of financing techniques. Your own money, other peoples money, private investors.

    If your NOI cash flow is a few hundred bucks and you don't have access to money then it gets really tough.

    What happens if you miss one or two months debt service in vacancy expense? Say goodbye to your recent cashflow profits. Cash flow problems suck big time. Not to mention wasted time.

    People that I know who own multiple properties started out doing everything on their own, they were basically handymen; multiple trips to Home Depot, spending weekends painting, replacing toilets etc.

    I'm not saying RE is not fastlane, it is, no doubt about that. But if I wanted to retire in 5-7 years and had very little access to capital then Real Estate would not be my first choice.

    To be dead honest Real Estate to me is like riding horses for transportation when I can just drive a car. There are better wealth vehicles out there IMO like the internet and new distribution channels like amazon and itunes that we didn't have before.

    I would use Real Estate for income and liquidity like the stock market, not use it to get rich IMO. :)
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  9. oddball
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    oddball 100 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Real estate is not overnight but not a bad way to make money. You hear horror stories about people who rent out a few duplexes and spend all their time being a landlord and how much it sucks, but that is not where the money is. If you want to be a landlord, think big. For the first couple deals you may need to work a little bit by managing the property or money to get your equity while investors/banks pay the rest. Real estate is all about using other peoples money to buy properties. You also need to be disciplined, figure out a plan and stick to it. Don't deviate just to get a property you want, if numbers don't make sense, move one.

    I like it, a guy told us a story about a huge RE success locally. He bought a dump of a piece of property for $5mm, he had a vision. If no one in his company share the vision, he asked they left. Then he built his medical office park, it's worth over $200mm today. (the $5mm didn't include development costs)

    The nice thing about real estate is you have assets, so as long as you don't over-leverage yourself, you have a source of money if you need it. But like others said, he can take longer than a business. A business has a much better chance for exponential growth.

    Check out Manny Khoshbin's book, very well written book and he has done pretty well in his career.
  10. Capital
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    Capital PARKED

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    I just recently read it. I really liked the book. Manny points out great information and talks about the strategies that have worked for him.
  11. oddball
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    oddball 100 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    That's one of the things I liked, he told what worked for him or not and why. Not so much fluff in the book but rather the real deal.
  12. Ecast88
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    Ecast88 25 kph

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    Do both. I currently run a business and I'm about to start investing in multi-family units. First choose one and then once you are successful start the other one. ALL successful people have multiple streams of income but they start out with one business model first. Also, in America, real estate has made more millionaires then any other business, just fyi.
  13. Steve37
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    Steve37 70 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    This all depends on how much access to capital you have or how good you are at raising capital. If you're connected enough you can absolutely find financial freedom in the fast lane time frame. That being said you've got no track record ( correct me if i'm wrong ) so it will be difficult to get people to throw money at you until you've shown them you're capable.

    Personally I would recommend starting a business and using real estate as an investment vehicle.
  14. oddball
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    oddball 100 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    This is the common denominator to most all the successful guys I know or heard about. They know how to raise money. Even look at KKR and Blackstone, companies founded on raising money. You can get equity in a deal just for being the guy to raise/manage the money.
  15. Tony I
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    Tony I 100 kph Read The Millionaire Fastlane Speedway Pass

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    He is actually the one who inspired me to look at real estate as an option. He did it fairly young as well, late 20's I think.

    I currently have a business that does fairly well (self publishing.) It is not extremely fastlane, so I was looking to maybe take some of the profit and buy a multi-family. It seems like that might not be worth it though, because of the time necessary to upkeep the property (unless I hire a property manager.)
  16. oddball
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    oddball 100 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I've been trying to call him because I know he does stuff in Texas and I am moving there soon, I spoke to him a couple times on Facebook but he is busy so doesn't always reply. I'm going to Cali at the end of the month to help my friend move and I am trying to get a hour meeting with him. I'm trying to put some of the things I learned in How to Win Friends & Influence People and see if I can make it happen.
  17. Capital
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    Capital PARKED

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    Have you emailed him? It's in his Instagram bio.
    Mannykhoshbin @ yahoo.com
  18. eliquid
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    eliquid 25 kph

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    Its called Real Estate INVESTING for a reason.

    Investing is typically not Fastlane. It can be if done a certain way, but for most reasons it is not as a whole. Investing is typically done when you have spare money to invest. You need to make that money first.

    I know there are "this and that" excepts to everything, but I am giving you a generalized view.

    Start a business, get cashflow, invest in RE once you have cashflow from your business.
  19. CEBenz
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    CEBenz 50 kph FASTLANE INSIDER Read The Millionaire Fastlane

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    Have you tried seeing if you could offer to help him, without compensation? Not sure what your skills are, but see if he needs help with anything, even if its just getting him coffee.
  20. Tony I
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    Tony I 100 kph Read The Millionaire Fastlane Speedway Pass

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    This is my plan. I currently do self publishing as well as selling on eBay which generates a few K a month. My dilemma is if I should try to buy a property with the profit, or re-invest it into my businesses.
  21. RBefort
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    RBefort 25 kph Read The Millionaire Fastlane

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    Startup>RE obviously, but for those of us that still fail at thinking of an idea (execution way more important of course) for a startup, Real Estate is a good way to escape something that barely pays 30-40k a year in a cubicle, provides freedom, and allows quick building of capital. If I had several ideas I wanted to launch and try out, then I would go the start up route. Now, I'm just looking to escape the 9-5 with a more profitable income source where I can work for myself; kind of like poker previously. You could scale enough in Real Estate to make 40-50k passively, allowing for freedom to pursue other things...instead of scrapping every dollar you can from the 9-5 you hate, draining your energy to give you an excuse to avoid the fastlane. But I am not going into real estate thinking I will be worth 20m+ anytime soon like I could be by building another business more in line with NECST
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  22. Windsurfer
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    Windsurfer 120 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I have been a real estate investor for about 7 years now. I have 8 properties and am about to acquire 2 more - mostly duplexes and triplexes. After I acquire the extra two I will be cash flowing about $10K per month. I'm currently at about $7K. I work a full-time job but will quit it when my kids are out of college. Although my cash flow is nothing compared to a lot of the millionaires here, I don't need to spend a lot of time on my real estate holdings. It gets busy when I acquire the properties because I usually buy dumps that need a lot of rehab, but once the renters are in, things settle down A LOT. Technology is definitely my friend in this business.

    Guys who start their own company can become fabulously wealthy, but they work their butts off doing it, and the success rate is not that great from what I hear. The chances of living comfortably from real estate seem a lot better, even if you are not generating as much cash. Besides the money, I think (especially as I get older) that the amount of time you have to do what you want is very important. Real estate is definitely not a get rich quick thing - but with inflation rearing its ugly head (don't believe what the government says - go to the grocery store and see), holding hard assets seems like a prudent thing to do. Just my $0.02.
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  23. oddball
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    oddball 100 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Don't think this is his main email. I got an email from him today (different address), my method worked. Unfortunately he is not available when I am in Cali to meet but he is going to give me a call to chat. I looked forward to the talk though.
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  24. bophisto
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    I am a fan of Jamie Tardy as well. She has had some great guests on her show, and great to hear stories and tips from actual millionaires.

    If you are doing it right real estate is a business. It should not be separately. If you want to make a lot of money with it, you will have to treat it like a regular business and not a hobby.

    Having access to capital is definitely a good idea. It's actually a lot easier getting access to money for real estate than a startup.

    I definitely think that real estate can be scaled the same way one might scale a non real estate company. It is true a lot of it does have to do with raising money.

    Also many people mentioned investing in terms of buying a property to rent out , but there are many other ways to invest or profit off real estate. Fix and flipping and wholesaling (where you basically sell your contract) are two other ways ,but there are many more.

    Fix and flipping and wholesaling I think are more fastlane methods.

    There are people that start out with one flip and then scale that up to several per month.

    As someone else mentioned development could be fastlane too.

    I do agree that real estate could be less risky in ways. If you look at some of the richest people even if real estate isn't their main business...real estate is definately an aspect of it.

    For example there are casino owners that bought the properties where their Casinos were located for a low price and then were able to sell for much more and then using that money to scale up.

    So real estate isn't their primary business ...Running a casino is ...but the land/property that casino sits on adds a lot to their bottom line.

    Syndication is another method that could be viewed as fastlane.
    This is an explanation of what real estate syndication is
    An Overview of Real Estate Syndication | Equity Interface Blog

    I also think the advice of doing both is good too.

    Among the richest people , I doubt there are many that DON'T invest in real estate.
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