Real estate mogul and Shark Tank investor Barbara Corcoran has built a $100 million net worth through savvy property investments and financial discipline. Her advice, distilled from years of experience, focuses heavily on real estate but applies broadly to wealth-building. Here are her eight core principles, stripped down for practical application.
1. Buy Real Estate Early
Corcoran stresses the importance of entering the housing market as soon as financially feasible. Waiting for the “perfect” time is a mistake; prices generally rise over the long term. Early entry secures your position and allows you to trade up as your wealth grows. Given recent economic volatility, she argues that now is as good a time as any to invest.
2. Don’t Wait For Lower Interest Rates
Hesitating for lower rates can backfire. Corcoran warns that a drop in rates will trigger a buying frenzy, driving prices up sharply (10-20%). Acting now avoids this competitive surge. The market doesn’t pause for ideal conditions; it moves whether you’re ready or not.
3. Invest in Emerging Areas
Target neighborhoods on the rise. These locations offer higher appreciation potential and avoid pitfalls like subprime mortgage risks. Growth areas yield bigger returns when you eventually sell. This strategy requires foresight but is a proven path to profit.
4. Consider Undervalued Districts
If family considerations aren’t a priority, explore areas with lower property values due to poorer school districts. These areas often present significant growth opportunities. Lower entry costs mean higher potential returns. However, Corcoran specifically advises against Florida investments at this time, citing overvaluation in its hotspots.
5. Put Down 20% on Multi-Unit Properties
For serious investors, a 20% down payment on multi-unit buildings is non-negotiable. This allows the rental income to cover the mortgage, effectively generating passive income. It’s a high upfront cost for maximum long-term gains. The goal is to break even while tenants foot the bill.
6. First Impressions Matter When Selling
Buyers form opinions within seconds of entering a property. Focus on the entrance, living room, and kitchen. Minor renovations can dramatically increase perceived value. A fresh presentation can translate into a faster sale at a higher price.
7. Shop For Mortgage Rates Aggressively
Don’t accept the first offer. Corcoran insists that banks often offer discounts to loyal customers. Even a small difference (0.25%) can save you substantial money over the loan’s life. Comparison shopping is essential, not optional.
8. Start Investing Early, Seek Family Support
Young investors should begin as soon as possible, even if it means asking family for assistance (especially for down payments). Corcoran dismisses the stigma, noting that most New York buyers under 40 rely on family funds. Leveraging existing resources accelerates wealth accumulation.
Corcoran’s advice is blunt but effective: real estate is a wealth-building tool, and timing, location, and aggressive negotiation are key. Ignoring these principles means missing out on potentially significant gains.
