Investing in Luxury Real Estate
How I Became a Real Estate Millionaire
Editor's Note: Today's Wealth Daily comes to you from global real estate consultant Paul Benson. I've personally known Paul for more than three decades, and I can tell you without a doubt that he's one of the brightest entrepreneurs I've ever known.
From hustling baseball stickers back in our early middle school years to selling million-dollar properties during the Great Recession, you will get no better education on how to get rich in the real estate game than from Paul. Enjoy!
Publisher, Wealth Daily
My career in real estate began in 2004.
I was living in Newport Beach, California, and I decided to spend a few months observing the real estate market and educating myself about the ins and outs of luxury real estate.
At the time, I knew if I were going to dive into the world of real estate, I would have to choose a market where I would have the most opportunity. So I chose Park City, Utah.
Park City was my top pick not because of its scenic mountains and great skiing, or its world-class golf resorts, but because I believed it had great potential and presented a unique opportunity.
You see, Park City is a tourist town, attracting a large population of high net worth resort enthusiasts every season, and there are new faces searching for properties every day that have no affiliation with a specific real estate agent. Couple that with a large inventory of multi-million-dollar properties and high demand, and you have an opportunity in the making.
I came from a competitive sales industry that was marketing-based. My first impression of Park City was that there were very few real estate agents willing to invest in their business. I felt this was a big injustice to their clients.
Taking a multi-million-dollar home listing, simply putting it on the local multiple listing service (MLS), and skiing the slopes until it sold hardly seemed like a long-term formula for success. So I decided I was going to be a different type of realtor, setting the standards for the world-class marketing of luxury real estate in a town that was bursting with opportunity.
Strategy is Everything!
My strategy those first few years was to build a presence in the local market through charity sponsorships, the local newspapers and magazines, and hosting events demonstrating how my team would do a first-class job selling luxury homes.
I knew I had to back this up with knowledge, so I read real estate books every day. I studied the market meticulously, constantly observing and analyzing the trends.
I became an expert in the inventory and transactions in my area and made it a point to know who bought what home when and at what price.
I quickly realized being a market expert was also a novel concept in Park City, and there was little to no competition. As the market heated up in 2005 and 2006, I began tracking buyer trends and analyzing luxury buyer profiles.
Based on my research, I focused my marketing efforts outside of Utah on feeder markets targeting luxury buyers looking for homes in the Park City area. At the time, I was one of the only realtors in the state of Utah with a regional marketing strategy, and I had an advertising and marketing budget that far exceeded any of my competitors'.
This business model proved to be a success, and my business continued to thrive at a steady pace. Although I was new to the market, I was ranked as one of the three top producing agents in the state in my first three years selling real estate in Utah, proving that anybody can start in the real estate market tomorrow and make a ton of money for themselves and their clients.
My First $5 Million
I earned over $5 million in personal income in my first three years as a realtor. More importantly, I was also making money for my clients, and I realized how loyal clients can be when you make a positive contribution to their bottom lines.
I expanded my business model beyond marketing luxury real estate and began building a separate business with a focus on real estate investments, helping clients identify the best investment opportunities in town.
The investment side of my business grew quickly as I became involved in large projects, including the sale of a $200 million ski resort as well as a large development island in the Bahamas. This experience brought me into contact with many of the world’s wealthiest individuals.
As my sphere of influence grew, so did my residential real estate business, and my listing numbers began to surge. I began listing and selling $10 million, then $20 million, and up to $50 million properties.
To this day, there are very few agents worldwide with a thriving business model managing the volume of luxury real estate properties I currently handle.
Then came the Lehman Brothers crash and one of the greatest recessions in the history of our country. But if you truly want to succeed in life, you can let nothing get in your way... not even one of the worst global economic meltdowns in history.
So in order to succeed, I realized that both relations with banks and understanding the short sales market would be pivotal in driving business for a few years. I restructured part of my business to focus on this area, and we survived. My large portfolio of luxury listings remained intact, and this meant I would need a significant marketing and advertising budget to promote these listings regardless of the recession.
I had to make a decision — to invest in the future or live for today. I chose to focus on the future, creating a plan that allowed me to live off my short sale revenues and invest all my revenues from selling luxury homes back into a comprehensive and highly targeted marketing plan designed to expand my business. The magazines had slimmed down, and I was one of the only realtors still advertising.
As a result, I was able to negotiate very attractive rates, and before I knew it, I was actually marketing my luxury listings more during the recession than prior to the market slowdown.
The advertising dollars paid off, and my portfolio of luxury properties began to grow again. As I began listing more luxury homes, it became apparent that in order to truly service my sellers, I would need to effectively target luxury buyers outside the United States.
Go Big or Go Home!
To expand my global reach, I joined Sotheby's International, a real estate brokerage firm with a local presence in over 40 countries and brand recognition in the global luxury market that is second to none.
Switching to Sotheby's International translated into immediate global exposure for my portfolio of listings, which had grown to over $500 million in 2011. As a result of my targeted advertising during the recession, my portfolio of listings was unmatched and had expanded to include luxury homes, condos, ranch properties, and land development parcels.
The Sotheby's International cutting-edge online marketing strategy guaranteed my luxury listings global exposure. The opportunities seemed endless. My listings were now featured on over 90 websites. With a portfolio of 100 listings, this meant I could be found over 900 times at any given moment on the Internet before I even pushed for promotion.
I added a social media specialist to the team to capitalize on this global exposure. My listings were now also being featured regularly on the covers of national luxury real estate magazines such as DuPont Registry and Robb Report, and I was being interviewed by international powerhouses such as the NY Times and the Wall Street Journal as an expert in the luxury real estate market.
I began traveling the globe to network and connect with other agents, taking advantage of the Sotheby's International brand and the global networking opportunities it presented. I hosted events for top banks, CEOs, and celebrities at the Sundance Film Festival, and I sponsored charity golf events in Lake Tahoe for the world’s top athletes.
Every new listing, every event, every new ad and magazine cover created new contracts and new opportunities. My business expanded to include the sale of hotels and commercial property. In 2012 and 2013, I was the top-selling commercial agent for Park City, as well as the top-selling residential agent.
I have been involved in 18 of the last 25 development sales in Summit County. I have consistently ranked number one in the state over the past three years, and I also ranked as one of the top 100 real estate agents in the U.S. for the past three years in a ranking by the Wall Street Journal.
Today, the business model I put in place ten years ago continues to thrive. I now travel across the globe, networking, building a global brand, and implementing the business model I used in Utah on a national level. And my consulting opportunities take me from France and the Bahamas to Dubai and Lake Tahoe.
Of course, one thing is certain: No matter where you are in the world, you will always encounter real estate agents trying to talk a buyer into a bad investment or a seller into selling his home under market value. But my goal is — and always has been — to educate people on how to make money in real estate and where to get proper advice.
In the coming weeks, I'll be sharing my thoughts, commentary, and advice on the luxury real estate market. As well, I'll clue you in on some of the easiest ways regular investors like you can make a ton of money in this space, regardless of how the overall economy is doing.
Global Real Estate Consultant
The Best Free Investment You'll Ever Make
After getting your report, you’ll begin receiving the Wealth Daily e-Letter, delivered to your inbox daily.