By Laura Alamery
Luxury portfolio is definitely the quickest way to real estate riches. Have you ever heard the statement, “the surest way to make $1-Million in real estate is to invest in a $10-Million home?” There is definitely some truth to that. The great news about it is that you do not need to have one million or 10 millions to invest in a luxury portfolio – like most of the strategies I teach about real estate investing, it is a matter of knowing how to control real estate.
Luxury Portfolio:
Many real estate investors have been engaged in luxury real estate investing for decades, keeping this as the best kept secret from the masses of real estate investors dealing mainly with “regular” real estate properties, unaware of the gold mine sitting right in front of them.
Mansions follow the same wholesaling principle as smaller homes: you can flip a mansion the same way as you flip a regular home, the only difference is the profit potential. Basically add a zero to your take home check.
There has been a surge in high-end and luxury flipping nationwide. Between 2011 and today, flips of homes valued at $1 million or more have risen almost 40 percent across the United States, according to RealtyTrac, the housing data company. Two main factors have contributed to this increase in interest on accumulating a luxury portfolio: the first one, with the real estate market collapse, Wall Street investors saw an opportunity in luxury portfolio investing and moved into the mid-market with so much money that they bought nearly every foreclosure in sight, mostly to rent out. The second factor has been the exponential increase of foreign investors in the US real estate market. Last year, Chinese investors spent $12 billion on U.S. real estate, making the country the second-biggest foreign investor, just behind Canada, according to the National Association of Realtors.
With so much money circulating in real estate investing from Wall Street to international investors, some areas are a sure bet for attracting high-end buyers either as owner occupants or investors looking to increase their luxury portfolio. These are some of the most popular cities for luxury real estate investing:
- Beverly Hills, California
- Manhattan, New York
- Bel Air, California
- San Francisco, California
- Palm Beach, Florida
- East Hampton, New York
- Martha’s Vineyard, Massachusetts
- Miami, Florida
- Malibu, California
- Denver, Colorado
However all metropolitan areas offer luxury portfolio opportunities – from major cities like Chicago, Dallas, Atlanta, to smaller up and coming cities like St Louis, Pittsburgh and Indianapolis, all have mansions and expensive homes flipping or investing opportunities.
Now the question is “how do I find luxury homes and buyers wanting these homes?” Like I stated earlier, the concept is the same: you can flip or own and rent out a luxury home the same way as you can flip or own a “regular” home. Motivated sellers are present in every type of real estate. However you have to be aware of a very important principle – motivated sellers of luxury homes do not place their houses in the newspaper, nor do they have “For Sale” signs posted in their yards, as do traditional sellers. The target audience of motivated sellers will most likely be experiencing one or more of what I call the “Five Major Motivators”: Death, Divorce, Loss of Job, Job Transfer and Illness.
Dealing with luxury homes involves a little of a shift in strategy thinking, although the concept of investing and flipping stay the same. Once you understand how to locate motivated sellers and high-end buyers, how to negotiate with them and structure the deals, even just one closing a year can yield more than most people can make on a regular job.
Would you like to learn more about Luxury Portfolio and Real Estate Investing? Check out my exclusive training at a very special price for a limited time only!
Laura Alamery
Laura Alamery has been a real estate investor and mentor for almost 30 years. She has been a pioneer of several real estate investing strategies before they became mainstream, from wholesaling to raising private money. Everything she teaches has been developed from personal experience.
She runs real estate clubs in several cities from Chicago to Atlanta and South Florida.
Her focus today is to streamline the real estate investing business by simplifying the process while exponentially growing the financial results. In other words, how to truly live a financially and active lifestyle, without trading time for dollars. Her signature program is Rapid REI Riches.
Read more about Laura and connect at Lauraalamery.com