Real Estate Mogul
How do some of the most wealthy RE moguls create such substantial wealth? I understand that compensation can be quite high, but even at the top level of REIT comp (somewhere around 20M/year) that’s nowhere near enough to lead to the net worth that some of the famous moguls have.
Most wealthy RE moguls aren't c-suite type guys at REITs. The wealthiest people in real estate are typically the ones that went off & started their own firm and happened to be in the right place at the right time. That isn't to say that all these guys had was luck. Most of them are extremely intelligent and know how to raise capital. On top of that, they leverage their deals and when successful make a killing when they exit.
I don't know how true this is, but I feel like a lot of them aren't typically your rags to riches type. They don't necessarily have tens of millions of family wealth to deploy, however they may get a little jump start & have the smarts to turn a small family business into an empire.
Another thing about these real estate moguls is that you don't typically see young ones. Real Estate isn't tech where you can become an billionaire over night.
>I don't know how true this is, but I feel like a lot of them aren't typically your rags to riches type. They don't necessarily have tens of millions of family wealth to deploy, however they may get a little jump start & have the smarts to turn a small family business into an empire.
This is very accurate in the family office space. The family became millionaires in some other business (very commonly construction on most of the US, the jewish NYC families were often in the garment business during the turn of the 20th century) and then deployed that capital into real estate (often to support the family business) only to find that you can make as much money on real estate as their operating business but with far far less employees and headaches.
Fisher's were originally general contractors Durst's were in the garment business Kaufman's were in the garment business Stern's originally sold parakeets which turned into a pet supply company Rose family, another garment business Tisch's, surprise surprise another garment business Rudin's started with a general store chain Tishman, department stores
It takes a lot of capital to invest in real estate so its often those who made money elsewhere (with lower barriers to entry) who are the "real estate moguls" you see today. Also keep in mind all of these families are not rags to riches in one generation. They were wealthy enough to own their own business over 100 years ago, investing in NYC when it was a factory city. Now 100 years later, with the power of compounding interest, the families are the moguls you see today but built on the backs of a few dollars spent a long long time ago..
Looks like I'm changing fields and getting into the garment business
J Kushner?! went hard af and ended up brokering middle eastern peace deals
Through entrepreneurship, not by working at a REIT.
The moguls are a different breed from your typical real estate entrepreneur worth 50+ million
One example I’ve seen is a guy who is worth around $70 mil but isn’t Tishman level of rich. He started out building single asset senior housing with friends and family money with extremely attractive promotes and took fees as well. He would build, stabilize, refinance, pay back his investors + their required return with the refinance proceeds to become the sole owner of the building. Then he took what little cash he had and did it all over again. You basically double down over and over again and eventually you have a handful of properties with $70 mil of equity.
I’m simplifying the process, but this is one way it’s done. Cheap Country Club equity + high leverage development built at such an attractive basis you can take out most or all of the equity with the stabilized financing + timing works out such that you can do it multiple times within a bull market
You mean someone like this!?
Just bought his seminar. Super excited to learn!
All this MS for some light hearted sarcasm... Tough crowd.
Sam Zell is the ultimate business man and RE pro. If you are younger and looking to learn about business and how to become a millionare, read his book and listen to everything he says on Youtube. even his bad bets will shed light on how to think within the constructs of today's and yesterday's economy, and how to adapt and what to watch out for in the future