$150M Serial Entrepreneur and Investor George Gstar’s 3 tips on Making Money in Real Estate
George Gstar also known by his stage name “GStar” on MTV or formally George Abbott, has managed to accumulate a net worth estimated to be around $150–180 million before the age of 30. George Gstar made much of his fortune in the logistics and metal recycling business, but says that real estate is one of the greatest investments one can make, especially after making some money. Over the years George Gstar has amassed a personal real estate portfolio north of $65 million alone, and says that real estate investing has been something he has greatly appreciated. George Gstar stated to Medium that his real estate holdings are spread between Miami, San Francisco, Las Vegas, Los Angeles, New York, and Costa Rica mainly. He says that knowing what markets to be in and when to be in them is critical to high yield success in the real estate game.
George Gstar recommended that the best way to make serious money in real estate is to have some money first, whether it be personal cash or a high-income producing business that you can leverage and purchase real estate assets with. He says that most people that are broke go into the mindset that they can just jump into real estate and make millions of dollars easily, which he says is a common farce. Though he believes people with little capital can get into wholesaling or being a real estate agent, he says instead of trying to be an agent, they should spend their time trying to create a successful high cash flow business that they can leverage in the future. George Gstar said that making millions in real estate takes some time and experience that can’t be gained in such a short period of time.
George Gstar told us a story on how he bought a $5.6M penthouse near Palo Alto, California, one of the most expensive zip codes in North America. He told us that he found a great opportunity in the marketplace where he said many tech companies are paying their executives 7 figure salaries and this has equated to a high share of people looking for million dollar properties in the Bay area, the most expensive real estate market in the United States currently. George Gstar purchased a condo listed in the most expensive building in the San Jose, California area for a reported $5.6 million and was neighbors with NBA Golden State Warriors star Kevin Durant. He lived in the penthouse for several months, and after 9 months the value of the penthouse had appraised at $6.8M. George Gstar held the property for several more months and eventually was successfully able to sell to a Silicon Valley CEO for close to $7M. George Gstar said he walked away with a very healthy $1M+ profit for just living in a property for less than a year. These are the type of deals that George Gstar looks for when assessing his next real estate moves.
George Gstar said he walked away with a very healthy $1M+ profit for just living in a property for less than a year. These are the type of deals that George Gstar looks for when assessing his next real estate moves.
We were able to get George Gstar to reveal his 3 top real estate secrets/tips that he recommends to anyone who is looking to do well in real estate.
Below are his 3 real estate secrets:
- Buy a lot when the market is distressed, and sell very high when market balances back.
George Gstar said that real estate a lot of times is all about timing. He says that getting into a market at the right time is the difference between huge profits and losses. People often try to buy things when they hear everyone talking about how good it is to buy in that market for example cryptocurrencies. When everyone was being told to buy into Ripple and Bitcoin, it was too late. George Gstar says when your uncle and the guy wrapping your sandwich at Subway is giving you real estate investing advice, you’re way too late! He says that wealthy people make investments when the general public doesn’t know yet.
George Gstar said it is best to buy a bunch of properties in bulk when the economy is in bad shape and people can’t afford to pay their mortgages. He gives his best example when in 2008, he said he bought of tons of units in Brickell, Miami, Florida at foreclosed rates. He was able to get many condos valued at $3M today for less than $400,000 a piece. Using this strategy takes having capital, but is highly lucrative if you can hold the properties. George Gstar says he held the properties for several years until around 2012–2013 when the economy started to finally bounce back and housing prices when back up. He made millions of dollars in profit and actually still owns some of those properties and is renting them out for $15,000 or more per month.
George Gstar said the best time to buy is when people are getting their homes repossessed by the banks. He says that he made a lot of money in Florida and Nevada using this model.
2.Look for markets where tech companies are expanding too.
As stated earlier in this article, George Gstar made a huge profit in less than a year for living in a million dollar penthouse in Silicon Valley. He said that many big tech companies and start-ups are getting funded everyday. Many of these companies are looking to expand into ‘free spirit entrepreneurial” markets and have a big budget when it comes to executive salaries. He says this creates a market effect of huge demand for high-end properties.
He says this issue causes property values to shoot through the roof in short periods of time. The negative effect is that many lower and middle class people are pushed out of cities because they simply cannot afford to live there. The example used was that Oakland, California 5–10 years ago was always known to be a rough and poor part of the Bay-San Francisco metro area. Today he says with the outrageous price increases in Silicon Valley, Oakland’s former community has been pushed out and no longer can afford to live in the city.
George Gstar says some of the best tech markets he has seen shoot up high in value in sort periods of time are San Jose, San Francisco, Seattle, Portland, Denver, Madison, Wisconsin, Grand Rapids, Michigan, Bellevue, and several other smaller cities.
3. Don’t underestimate what buyers will pay.
Lastly, George Gstar says to never sell yourself short and underestimate the value of property to buyers. He says sometimes sellers because of nervousness sell lower than they should because they simply are afraid they won’t find a buyer. George Gstar says that in the Bay he has seen really old, ugly 1200 square foot homes sell for over $1.5 million. He also said the average small studio in SF is more than $3500 a month rent.
He said that seller’s confidence is the key to getting a good deal and making a nice profit. He says that every time he sells, he comes up with a price very confidently in his head and sells. Even with talking with his agent on what’s reasonable, most of the time he says that his agents think they can’t sell as high as he wants. George Gstar’s confidence on selling is so high that he is often able to sell his buyers for much more than initially anticipated by his agents.
He says that you can’t put a price on emotion, and that most people buy things based on emotion. When things feel right and good, people will open up their checkbooks and pay you more. He says that knowing your value and being firm is crucial to maximizing your profits.
George Gstar says that if you’re interested in learning more about real estate investing and his strategies you should head to his website and look out for updates.
You can follow George Gstar on his instagram at @gstar4real. Click here to follow.