Real estate is one of the first marks of civilization. Owning lands and selling them is a cornerstone of development. But how did the real estate empires of today pave the way to creating their billions?
Owning land today is nothing trivial. Gone were the days when land ownership was exclusive to the nobles or the aristocrats. With people’s fight for their freedom and equality, we’ve come to the age where anyone who is financially able can buy and own land. But that’s not the only change in the real estate industry. Today, we also have different unions, associations, and appraisers. They all work together to create a dynamic system of buying, investing, and owning hard assets.
No longer nomads
The earliest human records show that our ancestors were hunters and gatherers. They moved places whenever resources ran out and only left some of their cave paintings and other carved trinkets. From being hunters, our ancestors veered toward an agrarian society, thus giving birth to homeownership. It took thousands of years before this kind of lifestyle was changed, which became the catalyst of what real estate is today.
It was then that they started claiming lands and planting produce. They settled into their lands and defended them from outsiders. They created a society where leaders approved land ownership, settled arguments and disputes, and collected payment from their subjects. From mere farms, they built villages, and from towns, they built cities. Thus, expanding the definition of ownership.
From tribe leaders came the birth of aristocrats. The lands were passed according to lineage, and not everyone had equal rights to owning land. Democracy came to exist. The government allowed title lands to be broken into smaller parcels and sold on a free market. People with money were now able to buy the land deeds.
Along with the industrial revolution, these finally opened the way for more equality. These two are the equalizers of modern human history. People who have the means could finally jump from one class to another, from nothingto proud homeowners.
Real Estates in the land of the free
The United States recorded its first home transactions from the late 1800s to the early 1900s. Why the change? It wasn’t until the 1860s that people could buy their own houses. The National Bank Act was implemented during these years, allowing ordinary people to borrow money from banks. In the years to follow, banks started lending people money for their homes. Mortgage then became a trend across the U.S.
Hello, bubbles and booms!
Mortgage then has a typical term length of five years, needs a 50% down payment, and borrowers could negotiate their deals. Today, the five years have been stretched to thirty years, and borrowers could choose between 5% to 20% down payment. The five-year term was acceptable, but all changed with the Great Depression. When the economy dropped, banks no longer had the money to lend, and the typical borrower didn’t have enough savings or cash. It was a financial dark age! People could no longer afford to buy houses.
It was imperative to stabilize the housing market. The government created several programs to ensure that the industry doesn’t crash but instead bring it to newer heights. By 1944, G.I. Bill offered subsidized mortgages for WWII veterans, which brought a rapid increase in demand for housing. After a decade, more than 50% of all Americans owned their homes. The demand increased, and so did the prices. This trend continues until today.
Build your Real Estate Empire
What does it take for you to build your real estate empire? There is no shortage of rags to riches stories. There are also books detailing their process of making their first millions. But for you, the key to build your empire is convincing investors to take the risk with you. You can probably do it yourself, but having investment partners would quicken the process. They have the skills that you don’t and bring ideas and financial support to the table.
That said, you must already be a successful real estate investor and have an impressive portfolio before you can start attracting partners. It’s your expertise and success stories that will reel them in. Another thing is to build a first-class real estate team. Your team will ensure smooth transactions. They are also your associates and business extensions. The other critical thing is to position yourself as a resource person. Establish yourself as the go-to person for anything real estate. Help more people with their transactions. You can start small within your community and let your reputation grow from there. Social media and word-of-mouth are powerful tools to ensure that your name is front and center on peoples’ minds when they need help on anything even remotely related to real estate.
There’s real work to do here, and if you’re not willing to do that, then it’s probably better to kiss your real estate empire goodbye
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Ike Bams and John Williams are founders of Bluelofts. INC. They are a new generation of millennial real estate developers based in Dallas, Texas, who aim to convert vacant office buildings into residential apartments. Click here to join our investor’s distribution list and create passive income with above-average ROI.
