Sidney Torres has made millions developing real estate. The secret, he says, is in the buy, not the sell.
In other words, renovations are not where the money's at. "A lot of people think, 'Oh I'm going to go in there and I'm going to renovate [the property] for a lot less and that's where I'm going to make my money,'" says the host of CNBC's "The Deed." "You make your money on the buy."
The best properties to buy are going to be those in up-and-coming neighborhoods that are "on the edge of the fringe," he says.
More specifically, the "sweet spot" is in the middle of the fringe and the hot spot. "That's where you find a good buy. You negotiate a good deal, and that's where you're going to get the best bang for your buck," Torres tells CNBC.
To find that sweet spot, you have to do your homework, Torres says: "Take your time. Search the area you want to be in. Talk to your mentors. You can never ask enough people before you pull the trigger and close."
While the secret is to buy right, that's not to say you can't make money off of renovations, the self-made millionaire says. You should just look at that money as icing on the cake, rather than relying on it: "You never want to be in a deal where you pay a little bit more because you think you're going to renovate it for less. You're putting yourself in a bad position."
In short, focus on "buying right," says Torres. "And guess what? That bonus comes if you renovate it for a good price."