Explore the realities of earning profits in real estate development and the importance of diversifying income streams. Learn about different ways real estate developers make money, including general contracting and pitching deals to investors. Discover ongoing construction projects, such as luxury homes and flipping properties, as well as plans to build an assisted living facility. Compare the construction, cost, and cash flow of assisted living facilities versus multifamily buildings.
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Quick takeaways
New construction assets offer a better chance of maximizing profitability and wealth accumulation.
Developers earn acquisition and developer fees, which can be reinvested to increase equity in properties.
Deep dives
The Importance of Building New Construction Assets
In the podcast, the speaker emphasizes the benefits of investing in new construction assets rather than older properties. New constructions have a longer lifetime, which provides more opportunities to generate profit. The speaker explains that when investing in rental properties, the real money is made when the property is sold. They give two examples of how to extract capital from a property: increasing rents and putting additional debt on the property or selling the property after a few years of appreciation. The speaker also mentions the option of refinancing, which can result in a tax-free event. Overall, the key takeaway is that new construction assets offer a better chance of maximizing profitability and wealth accumulation.
Multiple Revenue Streams for Developers
The podcast discusses how developers make money through various revenue streams. The speaker explains that they have a general contracting business and also build and sell single-family homes. As a developer, they secure deals independently and then pitch them to investors, earning acquisition fees and developer fees. These fees are reinvested in the deals, increasing the speaker's equity in the properties. They highlight that fees are not a significant money-maker themselves, but they provide an entry point into deals for those without capital. Additionally, the speaker mentions their ongoing projects, such as a 24-unit construction they are general contracting and the development of an assisted living facility. The discussion concludes with the speaker stressing the importance of asset accumulation and building for long-term wealth generation.
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About Ryan Pineda:
Ryan Pineda has been in the real estate industry since 2010 and has invested in over $100,000,000 of real estate. He has completed over 700 flips and wholesales, and he owns over 650 rental units. As an entrepreneur, he has founded seven different businesses that have generated 7-8 figures of revenue.
Ryan has amassed over 2 million followers on social media a...
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