Happy Friday. This is The Shake 🤝: the weekly newsletter covering real estate strategies dating back thousands of years… thanks for the inspo, Tiktok

Here’s what we got this week:

• The Richest Roman ⚔️ 

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The Richest Roman ⚔️ 

Turns out the Roman Empire is an era that crosses the masculine mind at least once a week nowadays…

We’d bet that most people envision titans like Julius Ceasar, Pompey The Great, and whoever Gerard Butler played in the movie 300.

But what about one of the wealthiest men in history?

Well, if you’re a fan of real estate, you should know his name. He basically invented the “Fire Sale” through a unique investment strategy.  

Marcus Licinius Crassus was an influential politician, general, and leader alongside Julius Ceasar and Pompey during the Roman Republic in 60 B.C. Raised in modest circumstances, he didn’t inherit any true wealth.

As a young adult, he commanded an army under the reign of Sulla and helped lead them to victory in a decisive battle to conquer Rome. This was an important feat in his rise to power and more importantly, real estate investing.

As the new master of Rome, Sulla gave his loyal allies anything they wanted during the proscriptions of his enemy's estates. Homes, silver, widowed wives, daughters - nothing was off limits.

Crassus wanted to take as much fortune as he could, and wisely focused on wealthy enemies who had a lot of real estate.

One story claims that he added the fortune of a man who was not on the auctioned list so that he could confiscate and purchase his portfolio at a discount…

If you haven’t noticed yet, the key to his investment strategy was to buy only distressed assets - smart but often times devious.

But this was just the start. Once he got his first taste of cash flow, he wanted to keep compounding these low-basis purchases.

It’s important to note that during this time in Rome, most of the urban population lived in Insulae - a multi-story apartment-type building made out of cheap building materials.

There are said to have been around 46,500 of these buildings during the late republican period.

Not only were they built extremely close to one another, but their materials made them susceptible to fires 🔥 

FYI, fires were a common occurrence throughout this time in Rome… I guess having torches everywhere can be a bad idea.

In comes Crassus with his most lucrative gig: Rome’s first-ever fire chief 🧑‍🚒 

Sound noble? Think again.

He formed the first fire brigade of enslaved people to ultimately purchase more cheap real estate.

Here’s how it went down 👇️ 

The brigade would rush to the scene of a fire when word came about 🚒 . But upon arrival, they wouldn’t immediately begin extinguishing the fire.

This is where leverage comes into play.

Negotiations would quickly begin in front of the inferno 🔥 

Crassus would offer to purchase the building for little to nothing from the distressed owner.

This was before any sort of insurance, so the choice was pretty easy… either sell at a loss and get something out of it or watch it burn and have nothing.

As soon as they agreed on a price, Crassus would direct his team to extinguish the fire 🧯 .

His next step was to rebuild the building through his team of skilled slave architects and builders. It’s said he had a unit of almost 500 slaves that would rebuild his acquisition pipeline of properties. Talk about a construction crew.

The kicker?

He often ended up leasing the building back to the original owners and having them become the property manager for a more passive investment.

Utilizing an early form of master leasing allowed him to continue scaling his portfolio with little headache.

Essentially, Crassus identified and exploited cracks in Roman society to form a clever blueprint for wealth: 

1. The lack of a professional fire-fighting service created a steady supply of fire-damaged insulae.

2. Poorly enforced building regulations allowed for Crassus to both build and maintain cheap insulae.

3. Indirect property management through primary tenants allowed for limitless assets to be controlled by one individual.

4. Skilled slave labor to repair damaged insulae.

5. The negative stigma surrounding the abuse of tenants leads to reduced competition from other wealthy politicians.

It’s said that this ruthless money-making strategy would have only worked during this exact period of time in late Republican Rome.

Question…

At his death, it is said that Crassus was worth 7,100 talents, equal to the entire annual budget of the Roman Empire. That translates to about $11.1 billion USD today.

So next time the Roman Empire crosses your mind, think of Crassus and how real estate is still one of the best methods of wealth generation today 🏘️ 

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^{DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.}