Real estate mogul and financial expert Barbara Corcoran recently shared her investing formula for buying real estate — a method that has turned out well for her.
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Speaking on the “BiggerPockets Real Estate Podcast,” Corcoran said, “I did have a wacky formula for buying real estate and I always did well by repeating the same little dance step again and again.”
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First, she always bought in up-and-coming areas. “I was in Brooklyn long before anybody was buying Brooklyn from Manhattan,” she said.
Corcoran discovered areas poised for growth by talking to struggling waiters and creative people and asking them where they lived. “And that’s always where I bought my real estate. That’s where the biggest gain is in up-and-coming areas,” she said.
Second, she said she always looked for a 10% partner.
“I found a local person who knew their neighborhood, loved their neighborhood, wasn’t in the business, I made them the 10% partner. I put in the cash, and they found me the best property, the absolute best property. I hedged my bet right away,” added Corcoran.
Corcoran said that they were equity partners who stayed with her until she sold.
“I hold onto properties a long time because I say you make a lot of money slowly in real estate, but when I sell, they get their 10% share and it’s substantial,” she added.
In a separate episode of the “BiggerPockets Real Estate Podcast,” Corcoran explained two additional “golden” real estate investing rules: put down 20% on an investment property and have tenants of that property pay the mortgage.
“That has always been my golden rule,” she said. “If you could buy a property with 20% down, which has always been my formula because I used to do with 10%, but it’s not possible anymore. Twenty percent down, you break even, you get the tenants to pay your mortgage, you always make money. And if you could saddle it onto the back of an up and coming area, you make a lot of money.”
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This article originally appeared on GOBankingRates.com: Barbara Corcoran Reveals Her Investing ‘Formula’ for Making a Fortune
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