How have you used the buy-and-hold method to build wealth in real estate investing?
This will sound very unusual and too good to be true but you can look me up and verify it as much as you want:
I focus mainly on single-tenant commercial properties (stand-alone buildings that can accommodate Jamba Juice, Starbucks, subway, etc) I put the property under contract for approximately 45 days for due diligence (no obligation to buy). I contact as many National brand tenants and give them info on the location I get one interested and I negotiate turn receive an LOI (letter of intent from them to lease) The LOI from a national tenant that wishes to occupy a property like this is usually for 10 years (sometimes 15 years) with their corporate guarantee and the terms of N (where the Tenant pays the property taxes, insurance, and maintenance). All this makes the property value go way higher than my contract to purchase when the property was vacant (for example: property under contract vacant for $600k.
Once I have the national Tenant’s LOI paying X for so many years with the corporate guarantee etc the value jumps way higher based on the expected income and that same property could easily become worth around $1mil now)
This is when I buy the property either all cash or with a loan. then I sign with the tenant and refinance within 90 days to get all my money back out
This gives me a 100% loan on the original purchase price (in the example I have here, it would be a $600k loan) while the property gets valued at $1mil or so
The cash flow is positive (interest rates are low and rental income is higher) with no management or other expenses (retail tenants pay almost all associated expenses I reinvest doing the same thing over and over This strategy made me a lot of money through the years and I even improved on it a bit by buying mixed-use properties where the upstairs could be used for office or residential which added to my cash flow
I even set up my own real estate funds and syndications over 10 years ago (started that in early 2009) and I trained people to identify these buildings and partner with me all over the US once they follow my direction and line up a national tenant they assign the deals to me for huge profits to them (see success stories on YouTube) I want to be clear that those who do it with me do not have to use any of their money to buy the property: I give them the proof of funds, the tenant lists of over 4000 national brands, the script to know what to say to the tenants, and the support to close these tenants. I actually get on the conference calls with the tenants they lined up and I negotiate the terms of the LOI and then they get paid through escrow when we close the deal within 45–60 days Btw if I or any of my students who Joint Venture with me. on deals like this fail to get a national tenant interested in the location within 44 days we simply cancel the contract and walk away with zero risk (whatever earnest money deposit was placed in escrow is fully refunded) This is how I buy and hold long-term cash-flowing properties with a) instant increase in value, b) no management headaches, c) automatic increase in rent of 3% per year, d) corporate guarantee, e) infinite rates of returns (since I get to refinance and cash out all my money within 90 days).
The key thing is all the work is done before I commit to buying and tenants must commit to leasing the property or I simply don’t buy it
I ended up becoming the largest owner of historic retail and mixed-use properties in Old San Juan, Puerto Rico even though I was based in CA and I continue to grow nationwide doing it with others through my real estate fund
Hope this gives you an idea of how you can go from zero to millions in net worth and received huge cash flow income in relatively a short period of time with no hassles and low to no risk (you can do the same and even grow with your own fund duplicating this strategy and system)