If there was ever any doubt about the wealth creation effect from investing in real estate, a recent article in Forbes about the Hamptons resort area on Long Island is proof. 

In the article,Wealth creation and real estate investing “Trophy Homes: Sand Castles,” the owners of the beachfront estates on Meadow Lanes, the most exclusive address in the Hamptons, were listed.  Of the twelve, more than half owed a significant portion of their riches to real estate.

Prospering from real estate investing were, prominent among the others, as listed in the Forbes piece were:

  • Julia Vance Carter, a real estate investor with $27.2 million spread across six acres;
  • Aby Rosen, with a $21.5 million 3.4 oceanfront acre, ocean front estate;
  • David Koch, a home builder, with a $23.2 million compound featuring 7 bedrooms, 9 bathrooms and tennis courts;
  • Ian Schrager, a hotel operator, with a $19.2 million oceanfront home with 10 bedrooms and 10 bathrooms;
  • Andrew Stein, a mortgage investor, with a $21.9 million, 10,640-square foot beach house with 10 bedrooms, 12 bathrooms, a guest house, swimming pool, and tennis courts; and
  • Henry Kravis, an asset manager, whose company, KKR, is heavily invested in real estate.

"I believe if you look at all the modern financial giants, each profited from real estate in some regard," commented Jerry Cohen, President and founder of EquityBuild, a premier real estate investment firm.  "In an interview on CNBC Money earlier this year, Warren  Buffett remarked that single family homes were among the most attractive assets."

Shaun Cohen, President of Equity Finance, the funding arm of EquityBuild, advised that, "You will see that the full range of real estate investing is covered by the owners of properties on Meadow Lane.  Stein is a mortgage investor.  Koch Industries is a prominent home builder.  KKR has made a huge investment in North Dakota real estate as a play on the oil and natural gas boom in that state."

Furthered Jerry Cohen, "The Forbes article is just additional confirmation that about 90% of the millionaires over the last two centuries have come from real estate investing.  In high yield real estate investing, we earn about 17% from flipping houses and 12% from financing private mortgage notes: do that enough, and you can afford a place on Meadow Lane, too.  How the current owners accumulated their wealth is proof of that fact of investing!"