The Single Best Way To Make 1 Million Dollars

Key Takeaways


Real estate investing is widely regarded as a great way to build wealth. Not only do you not need any degrees or certifications, but you can also find creative ways to fund your first deal even if you don’t have any capital of your own. Here’s the burning question everyone wants to know the answer to: how do you become a millionaire through real estate? Keep reading to get some practical tips on how to make a million dollars in real estate.

How To Make A Million Dollars In 8 Steps

Investing in real estate is a great way to increase your odds of making 1 million dollars. First, you can generate cash flow to scale your business. Second, real estate generally appreciates in value over time, save for a few exceptions. You can also intentionally add value to your properties by making updates and improvements.

If you want to make a million dollars, however, you’ll need a strategy. Below you’ll find the eight actionable steps you can implement to make a million in real estate:

  1. Learn About Real Estate Investing

  2. Establish Your Goals

  3. Start Now, But Start Small

  4. Write Offers For Affordable Deals

  5. Generate Cash Flow

  6. Start Growing Your Portfolio

  7. Invest In Larger Properties

  8. Continue Growing To 1 Million Dollars


[ Do you control your finances or are your finances controlling you? Register to attend our FREE online real estate class and find out how real estate investing can put you on the path toward financial independence. ]


1 million dollars

1. Learn About Real Estate Investing

Before you do anything, the first step is conducting research and educating yourself about real estate investing. You’ll quickly learn that real estate is one of those rare industries in which successful investors are happy to share their techniques and advice. There are hundreds of blogs, websites, and podcasts dedicated to real estate investing and how to be successful at it.

It’s also a good idea to expose yourself to the anecdotes of seasoned investors. You’ll get a sense of the character traits required to succeed in the field. Real estate isn’t for everyone, as it requires persistence, patience, and grit. This will be your opportunity to decide whether or not real estate investing is a good fit before you get in too deep.

2. Establish Your Goals

Once you have some research under your belt and have confirmed that you want to move forward in real estate investing, it’s time to set some goals.

Goal-setting is used by virtually every entrepreneur, especially the successful ones. It can help you gain clarity on your vision and what milestones you need to meet to achieve that vision. Further, your goals can serve as guidelines to help you make sure your actions are aligned.

3. Start Now, But Start Small

When you gain clarity on your overarching vision, you may feel overwhelmed at first. Many individuals end up procrastinating because they feel so overwhelmed. Some might not even try.

The key to your eventual success is to get started, and to get started now. It’s helpful to work your way backward and break up your goals into smaller, actionable steps. Even if you feel like that first step is small and insignificant, keep moving forward. Every action counts, and eventually, they will start to gain traction and give you the momentum you need. Whether it be something as simple as perusing the internet for deals or getting in your car to look for “for sale” signs, don’t wait.

4. Write Offers For Affordable Deals

The advice “start small” also applies to the kind of deals you should pursue at the very beginning. Don’t bite off more than you can chew by pursuing deals that cost more than you can afford.

Take a realistic look at your finances and figure out exactly what you can afford. If you’re just getting started, it’s likely a conservative amount.

Before you get discouraged, know that there are excellent deals to be had. What you need here is persistence. Keep making offers on deals you can afford, even if you get rejected the first few times. Eventually, someone will accept your offer. Don’t forget that it only takes one deal for you to break into the real estate investing business.

5. Generate Cash Flow

You should only submit offers for properties that will generate cash flow for your business. After all, you won’t get anywhere close to making a million dollars if you’re in the red.

Cash flow is the profit you make from rental income after paying all of your expenses. Common expenses include the mortgage, maintenance, repairs, and property management fees. Ideally, your rental income will pay for all of your expenses and leave you with a margin of profit.

6. Start Growing Your Portfolio

Aside from earning a profit, cash flow is the golden key to scaling your business. It might be tempting to spend your new income source, but now is the time to be diligent and save up. That’s because you can save up your rental income to put down toward a second rental property. This strategy is called the snowball method.

The goal is to eventually own multiple rental properties, including properties with multiple units. This is the fastest and surest way to secure enough income streams to make you a millionaire.

7. Invest In Larger Properties

Once you’ve added several residential properties to your portfolio, it’s time to level up. Many real estate investing experts will tell you that the most lucrative investments are commercial real estate and multifamily properties. Not only will they generate more income, but they will also appreciate at a fast rate.

There are two ways to do this: sell your current properties or leverage your equity. The nice thing about selling real estate is that you can avoid capital gains tax, as long as you plan to buy real estate using the proceeds. (This guide dives into how a 1031 exchange works.)

You can also leverage the equity you’ve built through your currently-owned properties. By refinancing them, you’ll receive some cash that you can then put down towards another property. Both of these strategies can be used repetitively throughout your career.

8. Continue Growing To 1 Million Dollars

Last but not least, don’t forget to keep growing. It will likely take a while to build momentum, and you are sure to make mistakes and run into difficulties. Even when someone succeeds in buying their first investment property, quite often, they’ll run into road bumps that discourage them altogether.

This is the point at which you need to push through and keep going. If you ever feel in doubt, pull out your list of goals from your goal-setting exercise to remind yourself of why you embarked on this journey in the first place. Every millionaire and billionaire has grown through their failures. Those who find success are those who keep their eyes on the prize.

How to make millions

Tips For Making A Million Dollars In Real Estate

Embarking on a journey of real estate investing likely feels scary. Try to keep in mind that thousands of other real estate investors have paved the way for you, and you can learn invaluable lessons from their successes and failures. Here are some expert tips for making a million dollars in real estate:

  • Learn Before Making A New Investment

  • Make An Emergency Fund

  • Use Leverage For Investments

  • Build A Real Estate Team

Learn Before Making A New Investment

Real estate investing involves risk, but those who become successful have learned to take calculated risks. They also mitigate risk as much as possible.

If you’ve gained confidence in a certain market or investing niche, you may feel ready to expand into uncharted territories. Growth requires stepping out of your comfort zone, but at the same time, it’s important to limit yourself to informed, limited risks. Learn as much as you can about your new venture so that you can mitigate your risk.

Make An Emergency Fund

An essential step of calculating your first rental property deal is factoring in the cost of building up an emergency fund. As you earn your rental income, make sure you’re paying yourself by setting aside money in case emergencies arise.

Although you’ll have a routine amount of maintenance and repairs to pay for, an unexpected disaster could devastate your finances. For example, a collapsing roof or a cracked driveway could set you back an entire years’ worth of rental income. By setting up a safety net, you’ll be able to cover any unexpected expenses and stay on track with your finances.

Use Leverage For Investments

One of the main reasons why individuals never break into real estate is because it is capital-intensive. However, what they don’t know is that you can use leverage to finance your investments.

Whether you borrow a down payment from a relative or a hard money lender, there are plenty of ways to invest in real estate with no money. The key here is to make sure you’re earning enough rental income to pay back what you borrowed, pay down your mortgage, and earn a profit. The main benefit of using leverage is that it will help you buy more house than what you could have had you used your own money. In turn, this gets you access to higher returns.

Build A Real Estate Team

Last but not least, know that no man is an island in real estate. Nearly every successful real estate entrepreneur has a strong team behind them. This includes your agent, broker, contractor, inspector, property manager, and attorney, to name a few.

Although it will take some time to build relationships with professionals, having a team that you trust will lower your costs over time. You’ll be able to call in expert help when needed, and because you have a strong relationship, costly mistakes caused by miscommunications and mistrust will be minimized.

Summary

If you’re wondering how to make a million dollars in real estate, know that overnight successes are extremely rare. Most real estate moguls experienced years of trials and tribulations before they found their success. However, investing in real estate is a tried and true pathway to building wealth. Not only do homes and buildings appreciate over time, but they’re also a great way to secure multiple income streams that far exceed your expenses. It’s easy to feel overwhelmed, but there’s no better way to get started than to get started today, and with small steps. Ready to get started? Check out our insider guide that reveals 10 tips for buying your first rental property.

Do you have any tips to share with budding real estate entrepreneurs? What was a pivotal moment that helped you make your first million in real estate? Share in the comments below!


Is a lack of funds keeping you from investing in real estate? Don’t let it!

One of the obstacles many new investors face is finding funding for their real estate deals. Our new online real estate class, hosted by expert investor Than Merrill, is designed to help you get started learning about the many financing options available for investors, as well as today's most profitable real estate investing strategies.

Register for our FREE 1-Day Real Estate Webinar and get started learning how to invest in today's real estate market!