What I’ve Learned From the Most Successful Real Estate Investors

Real estate has long been one of my greatest passions in life. I love everything about it: hunting for the ideal properties, bringing together teams of enthusiastic investors, creating perfect deals, etc. It is my passion for real estate that caused me to leave my cushy job as a lawyer to begin an exciting journey into the world of real estate investing.

When I was first getting started in the real estate industry, I took a job as a property manager at a large corporation. Working in this role helped me to gain invaluable real estate experience, but I knew I wanted to transition from the real estate business side to the investing side of the real estate world.

After several years as a property manager, I went to MIT and earned an MBA. Shortly after graduation, I found a way to get started in multi-family syndication, where my company purchases and manages deals, while raising capital from high net-worth individuals and family offices.

Learning From the Most Successful Real Estate Investors

In my career, I have been fortunate enough to participate in multifamily syndication deals, many of which are worth tens of millions of dollars. Typically, I invest in multi-family properties that are around $80MM-$100MM.

I've had great success with these investments, but if it weren’t for the inspiration of brilliant real estate investors who came before me, I may have never gotten to the level that I am at now.

Here are some of the top real estate investors that I look up to and what I have learned from each of them:

Sam Zell

One of the most successful real estate investors in the world, Sam Zell is currently worth around $5.5 billion. Sam has been participating in real estate investments since the 1960s. In fact, he actually began his real estate career by purchasing and leasing properties to other students while he was attending the University of Michigan in Ann Arbor in the early 1960s. In 1969, he launched his company, Equity Group Investments. One of the primary focuses of this company is real estate investing.

Sam Zell was also one of the key pioneers of the real estate investment trust (REIT) sector. He currently is the chairman of five public companies. One of these companies is Equity Residential (EQR), which is among the largest residential REITs in America. Sam Zell is also well known for selling Equity Office, a commercial real estate REIT to Blackstone for $39 billion. This was one of the largest real estate deals in history.

By following Sam's career, I have learned a number of key lessons. One of the most important of these is to be disciplined. Sam Zell has displayed an incredible amount of discipline throughout his career. Even when he was a college student, he focused on building cash flow and mastering real estate transactions.

Sam’s discipline has helped him not only to build one incredibly successful company, Equity Group Investments, which has thrived for over 50 years, but to become the chairman of five other companies, Equity Residential, Equity Lifestyle Properties, Equity Commonwealth, Covanta Holding Corporation, and Equity Distribution Acquisition Corp.

Sam Zell has used discipline to keep steadily growing his career and his empire for roughly 6 decades. He is currently 79 years old and is showing no signs of slowing down.

In my own career, I use Sam Zell as inspiration to maintain my own discipline and help keep me focused on my long-term goals.

Donald Bren

Donald Bren is one of the greatest real estate investors in American history. He is currently the wealthiest real estate investor in the country and has a net worth of $15.3 billion. Donald got his start in the real estate world early in life. This is because his father was a real estate investor. When Donald was a young man, he worked as a carpenter at his father’s buildings, helping to bring them up to tip-top shape. While working for his father, he also learned the real estate investing trade. Currently, Donald Bren has a massive real estate empire. He owns 550 office buildings, 125 apartment complexes, and a 97% stake in Manhattan’s iconic MetLife building. He owns over 115 million square feet of real estate in total, primarily in southern California. He is ranked number 132 on the Forbes Billionaires list. In addition to owning an incredible amount of office buildings and apartment complexes, he also owns several hotels, golf courses, marinas, retail shopping centers, and a coastal resort.

The main thing I have learned from this real estate titan is to always focus on the future and to never look back. Speaking about this topic, Donald Bren once said, “I really don’t think in the past. I sit down with many friends at dinner and they like to talk about the good ol’ days. I’m respectful of the good ol’ days, but I find myself spending very little time reminiscing. I’m really looking forward.”

Adopting the Donald Bren future-focused mentality has helped me tremendously in my career. This is largely because when it comes to real estate, the past is the past and a market that is solid today may be different tomorrow. Because of this, I constantly revisit my market choices and don’t reminisce on the past.

For example, I recently had a discussion with a real estate investor who used to buy multi-family apartments in Atlanta when the price was around $30,000 per door. Because he had been able to buy the buildings in the past at $30,000 per door, he was highly reluctant to buy more buildings when the price was approaching $100,000 per door. He was living in the past and the past shaped his perception and expectations of the market today.

Since this investor passed up on the $100,000 per door multi-family buildings, the Atlanta market has continued to heat up. By focusing on the future and not the past, I was able to buy multiple properties in Atlanta for above $100,000 per door. Currently, they are generating a 25% initial rate of return for my investors.

Warren Buffett

Warren Buffett is arguably the greatest investor to ever live. Although real estate might not be the top asset class that he invests in, he is still a wonderful example for all investors to follow. Warren Buffett is currently worth $110.4 billion and is ranked number 6 on the Forbes billionaire list. Due to his incredible success as an investor and his uncanny ability to pick stocks, he is known as the “Oracle of Omaha.” Warren Buffett bought his first stock at age 11 and first started paying taxes at age 13. He is the Chairman and CEO of Berkshire Hathaway, a massive multi-national holding company that owns more than 60 subsidiary companies including Dairy Queen, Duracell, and Geico.

The most important lesson that I have learned from studying the career of Warren Buffett and listening to the advice he regularly gives out in interviews is to “Be bold when everyone else is fearful and to be fearful when everyone else is bold.”

I have applied this principle directly to my real estate investing strategy and it has paid off tremendously.

For example, in the three years before the COVID-19 pandemic hit, many investors were buying multi-family properties. I bought slower and more carefully during this time. Then, during the pandemic, when no one wanted to do real estate deals and when there was a tremendous amount of fear in the market, I bought Element 41 for $80 million because I believe in the fundamentals of multi-family property real estate investing. This property has become one of the gems of my portfolio and its value is appreciating steadily as the pandemic winds down.

Conclusion

I am a firm believer that if you want to reach your goals and become successful that you should learn from great role models who have walked the path before you. In my opinion, there a few greater role models for successful real estate investors than Sam Zell, Donald Bren, and Warren Buffett.

The wisdom that I have gained by studying these great investors has helped me enormously in my own career. It has also helped many of my investors to experience tremendous gains and to acquire stakes in properties that they would have otherwise most likely missed out on.

Zell, Bren, and Buffett have all helped to shape my investing philosophy and strategy. I combine their best insights with my own extensive research, my education, and basic real estate fundamentals to find investment opportunities that are exceptional.

This technique has proved to be enormously successful, and I believe it will continue to prove successful for decades to come. I am excited to partner with many investors who share this same value system, and who support my investing philosophy for continued great real estate deals in the future.

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About Ellie

Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.

A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.

Ellie is the host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.

She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.

Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.

You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.