Real estate entrepreneur: Difference between revisions
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A '''real estate entrepreneur''' or a '''real estate investor''' to a lesser extent is someone who actively or passively [[investment|invests]] in [[real estate]]. An active investor may buy a [[real property|property]], make repairs and/or improvements to the property, and sell it later for a profit. A passive investor might hire a real estate firm to find and manage an investment property for him. Typically, investors choose [[real estate]] for several reasons: [[cash flow]], [[capital appreciation]], [[depreciation]], [[tax]] benefits and [[leverage (finance)|leverage]]. |
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Appreciation occurs over time, generally, though an investor may "force the [[ownership equity|equity]]" in a property by making enhancements to it or the surrounding environment to increase its value. In general, [[residential]] real estate is valued by the "comparable sales" method which estimates the value of property under the principle of [[substitute good|substitution]]. The method estimates property values by comparing a subject property to similar properties sold in similar locations within a recent period of time. |
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[[Depreciation]] is one of the many benefits afforded to real estate investors. Though the property is actually increasing in value, the government allows owners to systematically depreciate the property over its projected useful life span. Depreciation is an allowable [[tax deduction]]. In addition to depreciation, an investor will usually claim the [[interest]] portion of his monthly mortgage payment as a tax deduction. |
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[[Leverage (finance)|Leverage]] is a powerful reason for investing in real estate. If an investor used 100% cash to acquire a house worth $100,000, and the house increased in value by $5,000 in one year, then the investor made a return of 5% (assuming no other costs in this case). However, if the investor obtained 95% financing, only $5,000 cash would be required at the closing table, and a [[bank]] or other lender would loan the remaining $95,000 to acquire the property. |
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Assuming the same $5,000 increase in value, the investor's cash contribution of $5,000 would yield an increase in equity of $5,000 in one year, a 100% return. Leverage works in the opposite manner as well. A $1,000 decrease in value would produce a negative 20% return on the $5,000 investment. |
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[[Real estate investing]] has become quite popular in recent years due to rising property values and low [[interest rate]]s. However, [[Deflation]] in property values or a sharp increase in interest rates would dampen the [[Market (economics)|market]] considerably. |
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==Notable real estate investors/entrepreneurs== |
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* [[Richard LeFrak]], (New York based Real estate entrepreneur) |
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* [[Paul Allen]] (co-founder of [[Microsoft]] and Washington based entrepreneur) |
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*[[Donald Bren]] (U.S.-based [[real estate developer]]) |
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* [[Donald Sterling]] (California based [[real estate developer]] and former owner of the [[Los Angeles Clippers]]) |
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* [[Jerry Buss]] (entrepreneur, former chemist, and majority owner of the [[Los Angeles Lakers]]) |
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* [[Gordon Campbell]] (Canadian diplomat, politician, teacher, and former real estate developer) |
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* [[Barbara Corcoran]] (New Jersey-based businesswoman and [[Shark Tank]] investor) |
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* [[Jim Bob Duggar]] (Arkansas-based entrepreneur, author, and television personality, primarily known for the television show ''[[19 Kids and Counting]]'') |
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* [[Jonathan D. Gray|Jonathan Gray]] (Global Head of Real Estate and a member of the Board of Directors of [[Blackstone Group]]) |
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* [[Leona Helmsley]] (New York-based hotelier and businesswoman) |
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* [[Walter J. Hinneberg]] (German shipping magnate and owner of land under [[40 Wall Street]] currently known as [[The Trump Building]]) |
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* [[Carlos Slim Helu]] (Mexican entrepreneur) |
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*[[Thomas S. Hinde]] (Founder of [[Mount Carmel, Illinois]] and owner of investment properties in Illinois, Indiana, and Ohio) |
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* [[Li Ka-shing]] (Hong Kong-based businessman) |
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* [[Diane Kennedy]] (Reno-based CPA, best-selling real estate and tax author, Rich Dad advisor, real estate investor) |
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* [[Robert Kiyosaki]] ([[Phoenix, Arizona|Phoenix]] based entrepreneur and author of the ''Rich Dad Poor Dad'' series of books) |
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* [[Robert Kraft]] (Boston-based businessman and majority owner of the [[New England Patriots]]) |
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* [[Jared Kushner]] (entrepreneur and newspaper publisher) |
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* [[Sharon Lechter]] (Arizona-based businesswoman and co-author of the ''Rich Dad Poor Dad'' series of books) |
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* [[Louis Lesser]] (California-based real estate developer and businessman) |
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* [[Master P]] (New Orleans-based musician and entrepreneur) |
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* [[Paul McCallum (Canadian football)|Paul McCallum]] ([[Vancouver]]-based football player, real estate agent, and entrepreneur) |
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* [[Shaquille O'Neal]] (retired NBA basketball player) |
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* [[Jorge M. Pérez]] (Florida-based real estate developer and author) |
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* [[Arnold Schwarzenegger]] (California-based entrepreneur, actor in [[Terminator (franchise)|''Terminator'']] series of films, former [[Governor of California]], bodybuilder) |
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* [[Bernard Spitzer]] (New York-based real estate developer and father of lawyer and former Governor of New York [[Eliot Spitzer]]) |
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* [[Donald Trump]] (New York- and Northeastern U.S.-based real estate developer and entrepreneur and 45th [[President of the United States]]) |
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* [[Steve Wynn]] (New York-based casino entrepreneur and real estate developer) |
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* [[Sam Zell]] (Chicago-based real estate entrepreneur and newspaper publisher) |
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* [[William Penn]] (17th century real estate entrepreneur, philosopher, writer and [[Quaker]]) |
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* [[Frederick Hinde Zimmerman]] (founder of the [[Grand Rapids Hotel]] and real estate investor) |
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* [[Mort Zuckerman]] (magazine editor, publisher, and real estate entrepreneur) |
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* fictional: [[Batman|Bruce Wayne]] (industrialist, real estate investor, and superhero) |
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* fictional: [[Joseph Joestar]] (real estate investor) |
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==See also== |
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* [[Private investment capital subscription]] |
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{{Real estate}} |
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[[Category:Business occupations]] |
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[[Category:Investors]] |
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[[Category:Real estate investing]] |
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Latest revision as of 12:18, 26 October 2021
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