Leveraging Forced Appreciation for Real Estate Wealth
Real estate investment isn’t about buying properties and waiting for appreciation. It’s about using forced appreciation—a strategy that allows you to increase property value by making targeted improvements. This approach is the cornerstone of commercial real estate success and is how seasoned investors build long-term wealth.
In the recent episode of The Whole Enchilada of Real Estate Investing, Boris Sanchez shared how he turned a rundown eight-unit complex into a profitable asset. His story shows the power of forced appreciation and why it’s the key to success in commercial real estate.
The Importance of Forced Appreciation
For many investors, the idea of forcing appreciation might seem foreign. The concept is simple: instead of relying on market conditions to increase the value of a property, you improve the property yourself.
This can be done through:
- Renovations
- Filling vacancies with higher-paying tenants
- Making strategic upgrades
By driving up the cash flow, you force the value of the property to increase. This is a powerful tool in commercial real estate, where cash flow and tenant satisfaction directly impact a property’s market value.
A Different Approach to Real Estate
Boris’s journey into commercial real estate wasn’t conventional. After experiencing frustration with residential properties and house flipping, he shifted his focus. His first significant commercial purchase was a crack house—a property others would have overlooked. Using a creative financing strategy, Boris was able to secure 100% funding for the purchase and renovation, transforming the property into a cash-flowing asset.
What’s most valuable in Boris’s approach is that he wasn’t looking for a quick flip. He was looking for long-term cash flow, which only comes with the ability to force appreciation on a property.
The KISS Method: A Scalable Strategy for Real Estate Investment
One of the most important lessons from Boris is the KISS method: Keep Some, Sell Some, Scale. Instead of sticking to a single investment strategy, Boris encourages diversification. You don’t need to hold onto everything—sometimes selling a property can provide liquidity to reinvest in more profitable deals.
This method has a few core principles:
- Keep Some: Hold onto properties that generate cash flow for the long term.
- Sell Some: Sell properties to reinvest in new opportunities and scale your portfolio.
- Scale: Use the profits to acquire larger properties or diversify into other real estate opportunities.
Boris’s method ensures that real estate investors don’t get stuck in one approach and are always looking for ways to increase wealth.
Commercial Real Estate vs. Residential Real Estate
In Boris’s experience, the difference between commercial and residential real estate comes down to cash flow. In commercial real estate, properties are valued based on their income potential, not just the market price. This enables direct influence on a property’s value through improvements.
For example, by upgrading a multifamily property, adding units, or improving the condition of the building, you can force the value to rise. In contrast, residential properties don’t offer the same opportunity to drive up the value—they’re typically more limited by the market.
Protecting Yourself During Market Downturns
Real estate cycles are inevitable. Whether you’re in the middle of a downturn or experiencing market uncertainty, one of the keys to success is diversification. Boris has seen multiple downturns during his career, and each time, he adjusted his strategy to stay profitable.
One of the most effective ways to protect yourself during market downturns is to have liquidity. Having cash reserves allows you to purchase properties outright, avoiding debt and reducing exposure to interest rate fluctuations. This approach helps Boris maintain a stable cash flow, even when markets aren’t performing at their peak.
Creative Solutions for Property Investment
Boris’s story also highlights the importance of creativity in real estate investment. The ability to see potential in overlooked properties and to transform them into profitable assets is what sets successful investors apart.
He shares how he took a six-unit property that had been on the market for months and turned it into a valuable investment by adding extra bedrooms and bathrooms. This simple change allowed him to sell the property for $1.2 million—a $600,000 profit from a single deal.
How I Support Real Estate Growth
To make sure I can bring you the best insights and strategies, I rely on top-tier podcast concierge services. Managing a podcast requires a lot of behind-the-scenes work, and these services ensure that everything from editing to distribution runs smoothly. This allows me to focus on delivering content that helps you improve your real estate business. If you’re considering launching your own podcast or real estate platform, having a reliable production service can make all the difference.
Curious to hear the full chat with Boris Sanchez? Catch the full conversation on our latest podcast episode!
Tune in to The Whole Enchilada of Real Estate Investing and Unlock Success
Boris Sanchez’s approach to real estate investing is a great example of how creative strategies, like forced appreciation, can lead to long-term success. His journey from house flipping to owning over 1,500 units shows that with the right strategy, anyone can build wealth through commercial real estate.
If you want to take your real estate business to the next level, start thinking about how you can apply these strategies to your own investments. The right approach, backed by the right tools and resources, will allow you to create wealth that lasts.
If you want to connect with me directly or discuss your own real estate journey, feel free to reach out. You can also get in touch with Boris at borisatsandmore.com for advice, deal analysis, or to learn more about his approach to active commercial investing.
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Are you a high-performing real estate investor with a game-changing strategy? Apply to be a guest on The Whole Enchilada of Real Estate Investing! It’s a great way to share your expertise and inspire others to elevate their real estate game.
Marigona Gllarevaa – Jan 01, 1970