Peter G. Miller
OurBroker®

Real estate and real wealth have been a natural combination ever since someone wanted the best cave in the valley. Even at a time when the stock market has soared to historic highs, real estate remains the bedrock of some of the largest fortunes in America.

My interest in real estate and money began in high school. I worked during vacations for a real estate management company located near New York's Wall Street and was greatly impressed by what I saw: Each morning piles of envelopes stuffed with rent checks would be delivered. The checks were credited to each tenant, sorted by property ownership, bundled with rubber bands, and then dropped into a large brown grocery bag. Bag in hand and with me tagging along, one of the owners would then go to several banks each day to make deposits. After a round of banking it was then off to lunch, through the eyes of a teenager a great way to make a living.

Since then I've managed to meet a range of people who have amassed substantial real estate wealth -- ranging from those who have owned a few houses, to folks who have controlled thousands of apartments, and on to those who have vast numbers of commercial properties and measured their personal wealth in terms of eight, nine, and perhaps even ten figures.

What are the secrets?

The barkers on late-night television argue that you can make millions in real estate without cash or credit, but my conversations with those who have made it suggest otherwise. I think they would likely agree with the following principles:

• Start early. Real estate fortunes are generally made over a period of years, decades and generations. The earlier you start, the more time you have to accumulate property and benefit from appreciation.

• Live long. A little appreciation each year multiplied by many years can produce enormous wealth. Some real estate entrepreneurs have succeeded because they bought in their 20s and 30s and are still alive in their 80s.

• Save. One mogul, who built a realty empire that included dozens of shopping centers and more than 100,000 acres of land, once explained that "the hardest thing in life is to accumulate the first $10,000. After that, it's easy." His point, corrected somewhat for inflation, is that you can't invest if you can't save. Forget about fancy cars and big houses -- at least at first.

• Listen to others, decide for yourself.

• Risk is real. Not every investment pays off, and some are absolute flops. But tomorrow is another day.

• Honor commitments -- even if the result is a loss or something less than the best deal. Contracts and lawyers are nice, but your word is what counts and the only way to establish long-term business relationships.

• Never take the last penny from the table. When the another person prospers, you prosper.

• Book learning is great, but street smarts can't be ignored. One gentleman, whose bank -- the story goes -- had to be sold to pay the estate taxes when he died, bought a piece of Florida land that was largely underwater. You can bet that a few people laughed. He and partner filled it in, built a causeway, and that piece of dry land today includes a major shopping center and thousands of apartments.

• Live simply. Someone who owned dozens of New York buildings lived in a modest two-bedroom apartment. Curiously, the Florida developer also lived in an apartment that many mid-level managers could likely afford. In both cases, each owned only one car.

  "You can only eat so much," Perry Bass told The New York Times ("The Break-Up of the Bass Brothers," Nov. 24, 1991). "You can only wear so many clothes. I've got some nice paintings. Now I'm not buying any more. I don't have a place to hang them."

• Keep quiet. For reasons of modesty, privacy, and personal safety you would have a hard time finding many of our richer citizens. But if you look carefully, you might see that some folks seem to travel more, own their own businesses, and generally live well but not extravagantly.

• Help others. Donations -- sometimes prodigious sums -- should be quietly provided to help various causes. Perhaps the most famous case involves Julius Rosenwald, an early builder of Sears Roebuck. Rosenwald helped establish more than 5,000 minority public schools and some 4,000 libraries for minority students in 15 states before his death in 1932, a contribution needed because public funds were hardly available for such efforts. (See: "Shaping an American Institution, Robert E. Wood and Sears, Roebuck," by James C. Worthy)

• Have values. Money is great, but money is not a substitute for friends, family, good health, leisure, personal decency, and the other markers which define a truly successful life.

Looking for information regarding condos, co-ops, and PUDs? The Community Associations Institute is by far the best source online when it comes time to research community organizations.

Published: November 24, 1998

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Editor's Note: This article reflects the opinions of Peter Miller only and not necessarily the views of this or any other publication, organization or Website owner.

Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .