Ben Mallah aka “the $500 million man”, shares his experiences and real estate investing tips in the video below. Ben started from nothing, and he gives his advice based on his journey to success which included taking risks, adding value to properties, and seizing opportunities. Some of the most significant opportunities Ben highlights are market cycles and timing, both of which are key components of a successful real estate portfolio. He also outlines the importance of reducing debt, cashing out assets at the right time, and storing cash to capitalize on future opportunities.
Given the state of the real estate market in recent years, Ben gives his opinion on the impact of higher interest rates on his portfolio and the challenges he’s faced with running investment properties as expenses rise. Ben covers the topic of taxes and how to make the most of them for real estate investing, along with the role of interest rates in economic growth and the impact of political leadership on business conditions.
Ben’s Key Insights
Building a real estate portfolio from nothing 💸
Ben started his real estate portfolio from nothing, using credit cards and hard money loans to make his first investments. The first property he purchased was a rundown property in Oakland, California which he turned into a profitable venture over time. Ben’s advice for succeeding, particularly for investors who are starting from nothing, is to persevere and stay the course. With time, the right opportunities will come along and you can capitalize on these by taking calculated risks and putting in the effort.
Imminent market correction 📈
Ben believes that the market is due for a correction soon, judging by the high interest rates and rising debt. He highlights that this as a good time for real estate investing, as property prices are likely to become more affordable, particularly in the commercial real estate sector. Ben suggests having cash on hand, to quickly take advantage of these opportunities as soon as they come up, because he believes the “writing is on the wall,” as many loans are due and property owners may be in a hurry to sell soon.
Dealing with rising interest rates ⬆️
Ben explains that many of his properties have become much more expensive thanks to the rise in interest rates, even tripling on some properties! This is costing him an extra $5 million a year. He highlights this for other investors to learn that sometimes it’s better to lock in your interest rates, rather than leave them variable as this can be a costly decision. If you’re in a similar position to Ben you can follow his strategy by selling off any properties that have become too costly to maintain or keep running.
Deferring tax and 1031 exchanges 🛣️
Ben’s investment strategy hinges largely on 1031 exchanges. These allow investors to defer taxes by reinvesting gains from one property sale into another. For real estate investors, this can be a successful way to grow your portfolio and make sure your tax is as low as possible. Ben’s advice is to focus on “safe haven” properties such as retail centers with long-term tenants like Home Depot, because these assets are generally more stable in a volatile environment. 1031 exchanges can lower real estate investors’ tax liabilities significantly, but Ben notes that this strategy needs to be managed carefully to avoid any errors.
Preparing for retirement 🗝️
As Ben prepares for retirement, he gives his tips for managing your portfolio for this purpose. He is selling off many of his real estate assets, in order to simplify his business and transition to tax-free municipal bonds. These will generate a stable source of income that doesn’t require a high level of involvement. Ben’s children will be managing some of the properties, and his plan is for them to inherit a successful real estate portfolio.
Real estate as a safe haven 🏠
Ben’s biggest tip for real estate investing is that it’s a safe place to invest funds, particularly for those who are using the 1031 exchange method. He highlights the fact that properties with long-term tenants, particularly retail centers with national brands, are a reliable source of income. These properties can weather economic downturns better than others, and investors can look for areas to add value and generate a higher income over time.
2025 may be a pivotal year 📅
Looking ahead, Ben is optimistic about 2025 in the real estate market with a potential correction coming, he is expecting a host of deals to emerge. He expects auctions, foreclosures, and distressed properties to flood the market in the coming years, particularly in the commercial real estate sector. Ben’s advice to real estate investors is to get ahead, and invest earlier rather than later. He also stresses the importance of educating yourself and being ready to jump on opportunities as soon as they appear, to beat the competition.
Start building your real estate portfolio by educating yourself on fix and flip investing, rental properties and ground up construction projects. Check out our educational material below.
Who is Ben Mallah?
With over 30 years of experience, Ben Mallah has grown his real estate portfolio to an impressive $500 million. His journey began with the purchase of a crackhouse in Oakland, CA, and today his investments span a diverse range of assets, including apartments, shopping centers, and hotels. Starting from humble beginnings, Ben worked his way up to become a highly successful and influential real estate investor.