A real-estate expert and self-made millionaire shares the one rule he follows before investing in anything
It all started when he and his brother Matt, cofounders of real-estate firm The Altman Brothers, put in $5,000 each to buy a house for $400,000 (with 100% financing). They ended up flipping it and making a $200,000 profit.
That successful investment triggered more, and Altman reached the seven-figure mark at the ripe age of 26.
He promptly lost everything by 26 and a half, but he learned from his million-dollar mistake and has since established himself as a real-estate powerhouse.
Today, the star of Bravo's "Million Dollar Listing Los Angeles" has sold over $1.5 billion in real estate and has earned his million back tenfold: He has an estimated net worth of $10 million.
On an episode of Farnoosh Torabi's "So Money" podcast, Altman shared his best investing advice, and a rule he follows before making any investment: "Invest in something that you know."
For him, that means real estate. "Personally, I like to invest in real estate, because I'm an expert at real estate. I like to drive down the street and see my investment - touch it."
When he's investing outside of the real-estate realm, "It's got to be something that I use," he says. "If I like Colgate toothpaste, then I'm going to invest in Colgate. I don't invest in things that I don't use. That's my investment strategy personally, and it's worked for me."
That's not to say the average person should start picking individual stocks - in fact, many experts advise the opposite - but if you do decide to take any investment risks, play to your strengths. Next, be diligent, Altman emphasizes, because, "Nothing's a home run. Nothing's a sure bet."
Part of being diligent is planning for the worst, he explains. "In good markets or bad markets, you always have to look at what your exit strategy is in a worst-case scenario. When I buy a property to develop, I don't go off of the number everybody else is saying it will be worth. I go off of the number that I know that I can literally get rid of this property tomorrow for this price if I fire sale it - and I need to be OK with that."