Building wealth through business is just the first step for most entrepreneurs. The real challenge comes when you need to store and grow that wealth effectively. Real estate has become a popular choice, largely influenced by books like Rich Dad, Poor Dad, but choosing the right strategy can make or break your investment success. Dr. Connor Robertson breaks down the most effective approaches for business owners looking to add real estate to their wealth-building arsenal.
Choosing the Right Starting Strategy
Here’s what happens to most people getting into real estate: they bounce around like pinballs. Robertson sees this constantly. “Most people don’t figure this out until much later because they are jumping around from one project to another.” Fix and flips one month, buy and holds the next. Maybe some development thrown in for good measure. The options can make your head spin. Construction projects, wholesale deals, rental properties. Each one needs different skills, different money, different stomach for risk. Most people try a little of everything instead of picking one thing and getting good at it.
He suggests starting with wholesaling if you want quick money. “Wholesaling is when you take a piece of real estate, you put it under contract at a lower price and you resell to somebody else and you keep the spread between those two numbers.” It works, but there’s a catch. “That’s basically another job or a business,” he points out. Once the deal’s done, you’ve got cash but nothing else. No asset, no ongoing income, just money that you need to figure out what to do with next.
Understanding Power of Property Ownership
Owning property is different. Robertson breaks it down into four pieces that matter: “You get appreciation, depreciation as a tax benefit, cash flow, and mortgage pay down.” Most people obsess over cash flow and maybe appreciation. But they’re missing something big with mortgage paydown. “The mortgage pay down is probably the most underrated piece of it because a lot of people look at it and say, ‘Well, I’m just paying down 300, 400, 500 bucks a month,'” Robertson explains. Sounds small, right? But here’s where it gets interesting. “After you get through the first couple of years, you start paying down principal pretty aggressively.” Scale becomes your friend. “If you have 10 of these properties, you might be paying down three, four, $5,000 a month in principal,” he notes. Add in some appreciation and the numbers start looking serious. “If appreciation occurs—meaning the value of the homes goes up 5% in a year—and the mortgage gets paid down maybe another two to 3% a year, you’re creating this six or 7% spread from the value increase and the mortgage paydown.”
Building Wealth Through Value Add Deals
Buy and hold works, but it’s slow. Robertson doesn’t sugarcoat it: “Buy and hold real estate where you just purchase the property and hold it is very slow to build wealth even though you have the appreciation, depreciation, equity and cashflow.” Some people don’t have decades to wait for appreciation to kick in. That’s where value-add deals come in. “Value add real estate is when you buy a property that’s, say, $100,000, put 50K into it and maybe it’s worth $200,000, and then you can refinance out your money and you can do this in a perpetual process,” he explains. Buy cheap, fix it up, refinance, repeat. Sounds simple enough, though Robertson adds a warning: “There’s definitely risk—sometimes it goes really well, sometimes it doesn’t.”
Learning from Someone Who’s Been There
Books won’t teach you everything. He points this out about Rich Dad Poor Dad: “Robert Kiyosaki put out Rich Dad Poor Dad, which is a fantastic book, but it doesn’t really tell you a whole lot about what to do other than buy real estate.” You get inspired but still don’t know what to actually do Monday morning. The solution? Find someone doing what you want to do. “You’re not going to be able to decide what’s right for you until you do it,” Robertson says. “So what I’d recommend is you find somebody else who’s already doing this and then try to work through their process.”
Business owners have an advantage: they’ve got income to work with. The trick is converting that business cash into wealth-building assets.
Robertson keeps it simple: “Take that money and go plug it into a real estate deal, take debt, typically 20% down in cash, 80% debt, and then you go own that property.” But don’t go it alone at first. “Join a program, join a course, or find a mentor. Find somebody who’s doing what you want to do and learn their process or partner with them on a project,” he recommends. Do a few deals with someone who knows what they’re doing. Then you can start flying solo. Real estate isn’t magic, but it’s proven. For business owners looking to park their profits somewhere that’ll keep growing, it beats leaving money in the bank. Just pick a strategy and stick with it long enough to get good at it.
Connect with Dr. Connor Robertson on LinkedIn to explore more real estate insights for entrepreneurs.
