In the 1970s, Arnold Schwarzenegger made his first millions in real estate, before Hollywood turned him into an action star

In the 1970s, Arnold Schwarzenegger made his first millions in real estate, before Hollywood turned him into an action star. Schwarzenegger came to the United States from Austria in 1968 at age 21. He arrived with what he described as “empty pockets.” He built a career in bodybuilding and won competitions, but he also worked in construction. His financial path changed when he entered real estate. In an interview with real estate mogul Grant Cardone, Schwarzenegger explained how an apartment building investment helped him build his first fortune. His account also shows how property prices and access to real estate investing have changed since the 1970s.

How Schwarzenegger built wealth before Hollywood?

Schwarzenegger became known first as a bodybuilder. He won prizes in bodybuilding competitions and established himself in the sport. However, his early years in the United States also included construction work. He once described $5,000 earned from building a wall as a big paycheck. His income at the time was different from the money he later earned as an actor.


His move into movies came later. In 1982, he had his breakthrough with Conan the Barbarian. He then became known for movies such as Terminator and Predator. His movie career eventually made him one of Hollywood's highest-paid actors. But Schwarzenegger said his first millionaire milestone came before those movies.

The apartment building investment

Schwarzenegger discussed his early real estate strategy during an interview with Grant Cardone. He said he was already a millionaire before appearing in Conan or Terminator. He credited real estate with helping him reach that point.

Schwarzenegger recalled meeting a real estate professional named Olga. He said she was from Lebanon and advised him to focus on income property. Her advice was based on buying property that could generate rental income rather than simply purchasing a home for personal use.

According to Schwarzenegger's account, Olga told him that owning a house or condominium meant handling the mortgage and other expenses. She instead found him a six-unit apartment building that also had an owner's unit in the front. The property cost $240,000. Schwarzenegger stressed that this happened during the 1970s. At that time, the U.S. housing market was very different from the market investors face today.

The numbers behind the deal

The investment can be broken down into several figures.

• Purchase price: $240,000
• Down payment: $27,500
• Sale price two years later: $400,000
• Difference between purchase and sale price: $160,000
• Approximate return on the $27,500 down payment: 481.8%

The 481.8% figure assumes that the $27,500 was his only investment in the property and that rental income covered the mortgage payments and other expenses. That calculation does not include any additional rental income Schwarzenegger may have received while owning the building. The transaction therefore involved more than simply buying a property and waiting for its value to increase. The building had multiple units that could produce rental income.

Why the 1970s property market matters?

The purchase price becomes easier to understand when compared with housing prices during the same period. The median price of houses sold in the United States in 1975 was around $39,000. A $240,000 six-unit apartment building was therefore a significant purchase compared with the typical house price at the time.

Schwarzenegger's account shows how leverage and rental income could be used together in a property investment. A relatively small down payment gave him control of a property with a much higher purchase price. After two years, he sold the building for $400,000.

However, the example does not mean every real estate investment produces the same result. Property prices, mortgage costs, rental income, taxes, maintenance expenses and financing conditions can all affect the outcome.

Can investors copy the strategy today?

The basic idea of buying income-producing property still exists. Investors can purchase apartment buildings and collect rent from tenants. The market, however, has changed since Schwarzenegger made his investment. U.S. home prices have increased over the decades. The median U.S. home price reached $417,700 in the fourth quarter of 2023, according to the figure provided in the source material.

Multi-unit apartment buildings can cost more than individual homes because they contain several rental units and can generate rental income. This means an investor trying to follow the same direct ownership model may need more capital today.

Financing also matters. Mortgage rates, lending requirements and operating expenses can affect how much money an investor needs before purchasing a property. Investors also have to consider vacancies, repairs, property taxes, insurance and other costs associated with owning rental property.

REITs provide another route

Direct ownership is not the only way to invest in real estate. Real estate investment trusts, commonly called REITs, allow people to gain exposure to real estate through publicly traded companies. Investors can buy and sell shares of publicly traded REITs without purchasing an apartment building themselves. REITs can own or operate different types of property. These can include apartments, offices, retail properties and other real estate assets.

This structure removes some responsibilities associated with being a landlord. An individual investor does not have to find tenants or manage repairs for the properties held by the REIT. The value of REIT investments can still rise or fall, and investors should consider the risks associated with the particular REIT.

Real estate crowdfunding is another option

Real estate crowdfunding has also created another way for individuals to gain exposure to property. Crowdfunding platforms can allow investors to become part owners of diversified real estate portfolios. The amount required can be lower than buying an entire property.

The structure varies between platforms and investments. Investors need to examine fees, property types, expected income, holding periods and the risks involved. This means people interested in real estate no longer have to choose only between buying a property directly and staying outside the sector.

What Schwarzenegger's story shows?

Schwarzenegger's early financial story combines bodybuilding income, work, borrowing, rental income and property appreciation. His experience also shows the importance of timing. The $240,000 apartment building he purchased belonged to a housing market that existed decades ago. Property values and financing conditions have changed since then.

The key part of his account was his focus on income property. Instead of buying only a property for personal use, he purchased a building with several units that could generate rent.

His later career followed a different path. Conan the Barbarian helped establish his movie career in 1982, followed by roles in Terminator, Predator and other films. He later served as governor of California. Yet his own account places real estate before Hollywood in his journey toward becoming a millionaire.