I’ve always been interested in how to make money within the real estate market. I decided to read David Crook’s Complete Real-Estate Investing Guidebook.
A very good read despite the age of the book. Here were some of the learnings:
- Real Estate investing is a marathon, not a sprint. Avoid the get-rich-quick schemes.
- Real estate is a key part of the portfolios of men/women on the Forbes 400
- This is the path. Steady income with no significant debts. You still have to be frugal and similar to the Millionaire Next Door approach.
- A modestly successful investor should be able to amass a seven-figure fortune.
- 3 Questions to ask with all answers that should be yes. Be okay to walk away. Its business.:
- Is buying this property the best use of my money
- We could just invest in treasury bonds at 4%. After expenses, does the property make this amount?
- Will the property pay for itself?
- Can I increase the value?
- When you purchase, what can you improve to increase rent? Don’t just increase rent because you want to. Find value.
- Is buying this property the best use of my money
- 4 most important rules in real estate:
- Buy a property for less than you can sell it
- Look for properties and neighborhoods that show improvement
- Use as much of other people’s money as you can
- Make sure your property pays for itself
- Its an investment. Treat it as such. You wouldn’t pay $1000 to just have an Apple stock.
- Take maximum advantage of tax laws
- Buy a property for less than you can sell it
- Your primary home is not an investment. It will always lose money. Rentals though are different.
- Real estate business is good business. It’s giving people a place to live.
- Real estate booms with the job market of certain areas
- Smart. You make more money renting out 4 25 sq ft spaces… compare to one – 100 foot space.
- A good location for your home may not be a good home for an investment property.
- Keep houses within close proximity. Avoid long-term deals.
- Approach like a business and have a business plan.
- No property should ever cost more than it makes
- Gov’t love real estate investors
- Passive income benefits
- Depreciation
- Don’t use your house as an office for tax breaks. Bad news.
- Look at opp for building sole proprietorship or LLC.
- With little debt, some savings, liability insurance – you’re probably safe from excessive claims
- Many investors setup LLCs for each property they own
- Commercial is complicated. Contracts are more custom. And support is needed 24/7.
- Residential:
- Make sure the people on the lease are the only ones living there. More people = more rent.
- Be consistent in checkups on the house. Do this at least six months to ensure everything looks good. Don’t lose touch.
- Do annual maintenance
- Liability insurance
- Renters insurance
- Review and ensure contract covers you. Also define terms of eviction.
- REITs – Diversify. Ensure company has holdings in different regions, as well as different channels
- Buy only properties that you can sell for a profit from right away
- Keep investing and keep growing. 5th secret to real estate.
- Leave your IRA alone. It shouldn’t be touched to pay for real estate investments.
- In any market, there may be deals on the multi-family homes. When houses are in a sellers market, these houses may have better deals for the same price. Keep in touch with your property. This is not a business to pay money and then hope for the best. You have to keep a close hand on it.
- Be frugal. Rich people have one dominant trait. They’re frugal. They drive ordinary cars, live in ordinary houses, and never overspend.
- If done right, real estate investing can give you financial freedom. You can support your children’s educations, have a good retirement, and pass an estate to your children