Attention Real Estate Investors
If you are a real estate investor who is just starting out you should check out biggerpockets.com. This website is a tremendous resource for real estate investors who have big goals. Recently, biggerpockets.com posted a blog about MUST reads for beginning real estate investors. I have included some links a review of a few of the books below. The author of the blog is CHAD CARSON and he does a great job. Enjoy.
1. Building Wealth One House at a Time by John Schaub
Topics Covered:
- General principles and strategies
- Financing
- Deal analysis (the basics)
- Finding and negotiating deals
- Property management (the basics)
- Legal and contracts (the basics for leases, options, and purchase contracts)
What I Like About This Book
John Schaub was one of the original teachers I learned from, both with his book and with other sources, like his newsletter and in-person classes. I consider John the Warren Buffett of real estate investing. His advice is down to earth, solid, and it’s worked for over four decades in his business as a landlord, house flipper, and lender.
I often hear people complain that some investing books can be too basic. I find those same people often ignore fundamentals while searching for glitzy, more complicated concepts that supposedly are better.
This book is all about the fundamentals. He covers an overall strategy for achieving financial independence with residential real estate, and he also gets into finding, financing, renting, and selling properties.
The main idea of the book is that you can build a fortune and do everything you want in life by investing in little real estate deals like single family houses and small multi-units. I have taken this advice to heart, and I agree wholeheartedly with it.
Big Ideas From the Book
- Buying one house at a time can make you wealthy
- Houses are your best investment
- The right houses attract long-term tenants
- Buy houses without borrowing from banks
- Sell houses using lease options for maximum profit
- A plan to get properties free and clear of debt
Caveats
John spends some time talking about appreciation of real estate and how it can make you rich. I would be careful depending upon appreciation as part of your real estate evaluation. Appreciation is uncertain and difficult to predict or depend upon.
A more conservative plan is to make enough money using other methods John talks about, like cash flow and amortization of loans. Appreciation may come, but your deal should work without it.
2. The Book on Investing in Real Estate With No (and Low) Money Down by Brandon Turner
Topics Covered:
- Financing
- Deal analysis
- Legal and contracts (just the basics of notes, mortgages, and leases)
What I Like About This Book
I like that Brandon is very thorough and detailed in his coverage of the non-traditional tools you can use to finance your real estate purchases. I also like that he practices what he preaches, as in he has used most of these tools himself to create a great portfolio of real estate.
The title includes “no money down,” which might understandably be a turn-off. But realize that the book is not about getting rich quickly with tricks or getting something for nothing. The book simply gives you a full toolbox of financing techniques that you can use to buy real estate.
Related: The Practical, 3-Step Way to Get Started in Real Estate With No Money
You can always use more conventional strategies like going to the bank, putting 30 percent down, and getting a conventional loan if you want to (or if you can). But do yourself a favor and learn how to make money without traditional money, and the rest of this real estate game will be a lot easier.
Big Ideas From the Book
- Begin investing with owner-occupied properties
- Creative strategies = tools in a toolbox
- The “elevator pitch” for private lenders
- A laundry list of creative financing techniques and strategies with explanations
Caveats
Brandon admits as much, but this book is only the beginning of your study of financing techniques. To actually execute them will require local help with the legal and contract part of the techniques. But the knowledge of how and why are the important foundations you’ll get in this book.
3. What Every Real Estate Investor Needs to Know About Cash Flow by Frank Gallinelli
Topics Covered
- General principles and strategies
- Financing
- Deal analysis (the basics)
What I Like About This Book
This book is all about the numbers, which is perfect for a real estate nerd like me. Success in real estate always comes back to the numbers. But amazingly, so many so-called investors don’t know how to do them correctly.
This book is a guide to both the big picture concepts of deal analysis and the nitty gritty formulas. It covers in great detail, along with examples, just about every analysis tool I can think of. Beginners can use it to learn, and any investor of any experience level should keep it on their bookshelf as a reference and refresher.
I also like that he includes free Excel spreadsheets that let you get “under the hood” and see how the formulas in the book actually work.
Big Ideas From the Book
- The four ways to make money in real estate
- Become a financial detective before you buy (uncover the REAL data)
- Use math, not emotion, to make financial decisions
- 37 calculations every real estate investor needs to know
- Multiple methods to calculate return on a real estate investment
Caveats
The strength of this book is the thoroughness of the content. That is also its weakness. I think the challenge will be, especially for beginners, not to get overwhelmed or intimidated by so many formulas and ways to analyze a deal.
Getting started successfully as an entrepreneur (real estate is a business, after all) is about math, but it’s also about psychology, momentum, and consistency. Fear of failure or analysis paralysis can kill your dream as a beginner investor.
So, my recommendation is to pick the gold nuggets from this book and learn the essential, basic formulas. Go get in motion, make offers on deals, and continue coming back to this excellent resource over time as you grow.
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