In the online WSJ article above titled "The Accidental Real Estate Tycoon" the author, Eliot Brown, writes about Paul Allen, Microsoft co-founder and owner of the Seattle Sea Hawks, and his accumulation of wealth from participating and investing in real estate. It also goes into detail on the various projects that are owned and being developed by Paul Allen himself such as a $200 million dollar project which Allen plans to develop 3 parcels of land in Seattle into 650 apartments.
Being the co-founder of Microsoft, Paul Allen already had massive amounts of capital and a large net worth of about $17 billion, but he increased his wealth even more by investing in various real estate developments and projects to eventually form his own firm named Vulcan Inc. As the title of the article states, Allen did not initially plan to actively participate in real estate, but fell into it after giving a $20 million dollar loan to a non-profit that defaulted which gave him ownership of the non-profits land. Even though many wealthy individuals invest in real estate, many usually invest passively through private equity funds or established developers. Paul Allen went against the grain and aggressively invested a significant portion of his net worth into real estate projects himself without the middlemen and fees.
This article gave me some insight into the possible opportunities for accumulating wealth in real estate development for a wealthy individual such as Paul Allen. Being a senior finance major about to graduate and start a career, I'm considering investing a significant amount of my income into real estate. Maybe one day I'll have accumulated enough capital to actually become an owner/developer in various real estate projects, but I realize there are also significant risks in doing this. I'm sure Paul Allen didn't make significant or even positive returns or gains on all of his real estate investments, but when he did it was most likely extremely lucrative for him. Very wealthy individuals such as Paul Allen have the ability to take these risks.
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