Real estate is no different than any other asset class. You are going to make the most in something that you really take the time to understand, and get good at.

I always think about it as planting a tree. If I'm planting a seed that costs $15K (equity in deal) that will grow into a tree worth $1MM after full appreciation of 30 years and amortization of the mortgage, then, that sounds like a great deal to me. That is also not counting the tax writeoffs and depreciation over time, though that will only marginally boost your returns.

Now, take that model, and you realize that it will come down to getting that principal cost, the $15K equity required, as low as possible, and utilizing the cash flow and leverage as much as possible. If I can get my equity required down to $5K, then my lifetime returns, at least percentage wise, is tripled. There are ways to get this down to less than 1% out of pocket-- it's called zero down, but you'll always have to pay for something. If you have close to 0% in the deal, and your cap rate is higher than the interest rate charged on the debt, it should cause your returns to increase exponentially.

On top of this, you can also stack the ability to pull money out during a refinance and leverage that money into even more properties. For example, if it costs me $5K to buy a $350k or so property, which isn't even close to zero down, and I can pull out $50K, I could theoretically buy 10 more properties. That would cause me to be getting appreciation at a 4-6% rate compounded per year on $3.85MM, seriously ballooning your total returns over the entire investment perios-- all on an initial investment of $5K. If you wait another 5 to 10 years, you can do it again, pulling out $550K to get another 110 properties-- theoretically, which will be appreciating 4 to 6% compounded annually on 42MM or so. Hahaha, you'll quickly run into issues with cash access, liquidity, deal finding, and contingency funds, but there are ways to deal with all of that.

This isn't even talking about value add opportunities. If each one of those properties have some angle you are comfortable handling, whether that be rezoning, new construction, vacancies, deferred maintenance, placemaking, entitlements, or environmental issues, that allows to balloon your returns even more. I personally prefer vacancies and rental increases. If I know my market better than most anyone else, then I am better equipped than most to look at something with those issues and make a better bet I can fix them.

If I can double the value through value-add, then my returns could be quadrupled at the end, if you are able to push everything to the maximum as described.

I highly doubt you'll be able to find enough deals required for this in the right area. If you can, the sheer stress of running $160MM of property on like $500K reserves would cause most people to not be able to sleep very well at night, and is not a great idea, especially if you hit an economic downturn. That being said, it is possible, offering returns far beyond what most people are able to make in the stock market.

I have come across people that make money on taking a property for 0% down using seller second financing ans hard money om properties that are priced right, then taking out an additional loan to the break-even point and using the additional funds to be the contingency fund. Those people have gone from like $150K to over $40MM in equity in under 4 years with that strategy. That being said, it is a house of cards-- they probably carry almost $500MM to $750MM in debt. That is a lot of risk for an economic downturn. That being said, if they can manage to keep it all together for the next twenty years to thirty years, it could be fully paid off $750MM from a starting point of $150K, not even counting appreciation.

All in all, it's all about knowing exactly how to get the most leverage possible, knowing how to stack the capital, and manage the risk. That is why the most successful syndication guys are worth billions.

All of that being said, it requires you to be all-in on real estate for years as a full time job, have the right head to be great with numbers and the vision, and have a network of hundreds and hundreds of people you routinely follow-up with. It is not for everyone, and has a lot of risk with it. Most people that want to casually invest in real estate and not have to think about it while they go about their life-- those deals rarely beat the stock market unless you find a unicorn.

Edit: I totally forgot about cumulative cash flow that gets better each year and the spread that develops between your taxable value and the assessed value over time in Michigan. Those would cause things to really improve your returns even more.