Thirteen years ago I was a brand new real estate investor. I had just graduated from college with a biology degree, and I decided to jump into the world of real estate entrepreneurship full-time. Looking back, it was sort of a crazy move. But I wanted a challenge and freedom more than I wanted the security and comfort of a steady job. I’m very glad now that I made that decision. Unfortunately, when I began I had zero experience in business or finance. I had cleaned and painted a few rentals for a family member during middle school, but that was the extent of my real estate experience. I had never even owned my own home before attempting to buy my first investment property. So, if you think you know nothing about real estate as a beginner, try that! Self-education was obviously a big priority during my early investing career. Some of the early education I received was great, but just as much of it was a distraction or a waste of time that slowed down my progress. So, the purpose of this article is to give advice to my beginner self. What follows are the 7 books I would recommend to myself if I could go back in time after my 13 years in the trenches of full-time buying, financing, selling, and renting residential real estate. Enjoy! 7 Topics Beginners (and All Investors) Need to Study Ok, rookie. You have a long road ahead of you. In addition to a whole lot of hustle, knowledge will be your key competitive advantage. While you should stay humble and realize there will always be more to learn, don’t underestimate the power of intense, focused study for a short period of time. If you will commit to daily, real-world learning plus deliberate study of the topics I share below, you can educate yourself better than 90 percent of real estate investors in just the next 12 months. Here are the 7 real estate topics I recommend you focus on during your early education: General principles and strategies Financing Deal analysis Rehab and construction estimating Finding and negotiating deals Property management Legal and contracts These are your educational building blocks. Look at these as the “101 courses” in your self-education as a real estate investor. The books you read, the experienced investors you meet, and the mistakes you make will all be your teachers. So take good notes! Why Books? Everything is free on the internet these days, right? So why read books? Well, you should spend a lot of time on sites like BiggerPockets.com, beginning with their free Ultimate Beginner’s Guide to Real Estate Investing. You should interact in the Forums to ask questions. You should get as much information for free on the internet as you can. But I like books because they are a way to focus your education without distraction. Reading a book is a much different educational experience than the constant beeping, pop-ups, and eye-candy you’ll be distracted with while on your mobile device or computer. Related: 5 Powerful Books That Changed the Direction of My Life I still love physically holding a book, circling and underlining big ideas with my pen, and then making notes in the margins (although I’ve also started doing this with e-books on my tablet). I also love the “conversation” you have with an author of a book. It’s like they’re your personal teacher. I even find that just walking by and noticing a physical book on my shelf brings back ideas and reminds me of the tips that author gave me in the past. So, if you’re on board with using books as a key part of your education, here are my 7 top book recommendations for a beginner real estate investor. 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. 4. The Book on Flipping Houses by J Scott Topics Covered: General principles and strategies Financing Deal analysis (for flips) Finding and negotiating deals Systems and processes for flip business (EXCELLENT!) What I Like About This Book I like the way the author J Scott’s mind works. He is systematic, he is thorough, and he gets both the big picture AND the details. That’s rare! As a result, what you get in this book is a comprehensive guide to the flipping business. You won’t have to search around in other places to get the all the parts he left out (except his other book on estimating rehabs, which is the next book I recommend). In addition to content you’d expect on a book about flipping, I like that J gets into the nuances of analyzing and choosing a target market. This is such a fundamental step that many novices miss. J gives you some really good insight that you can use to analyze the potential in your own market for flips or to analyze future markets you may venture into. I used J’s methods in my own market and was amazed what I found out (after 10 years already investing there!). Big Ideas From the Book Get your financing in order first Find and analyze a farm area (or areas) for your flip business Distressed properties: what, why, and how List of sources of good deals The 100 house rule Project scope of work and schedule (I use J’s tools on this weekly) Staging houses to sell: what, why, and how Caveats This is a great book. There’s not a lot I could find wrong, other than to point out that different markets have different styles of flipping based upon the housing stock. A lot of the backdrop for this book was J’s investment business in suburban Atlanta, with its 1980s, mini-mansion style houses. A lot of the examples were based upon that model. The same principles can obviously be applied to in-town rehab of older homes and even to in-fill-lot new construction. Check out J’s free ebook on BiggerPockets.com to see how he’s applied the principles in this book to the new construction niche. 5. The Book on Estimating Rehab Costs by J Scott Topics Covered Rehab and construction estimating What I Like About This Book Just like his companion book on flipping houses, this book is systematic and thorough. It flows well, it all fits together, and you can take the concepts and apply them successfully right away. I had a pretty good system of deal analysis before I read his book, but I liked the way J Scott sectioned the rehab of the house into 25 components. I bought the full package which gave me a checklist/spreadsheet with all of those components, and it makes the estimating of the total cost much more accurate. I use it just about every week. Related: The Simple Step-by-Step Guide For Rehabbing Your First Rental Missing just one or two repairs can make a big difference in your flipping or rental profits over time, so using a system like J’s is critical. Why reinvent the wheel? J wrote the book. Just copy him! Big Ideas From the Book The 25 renovation components A list of factors that impact rehab costs How to pay contractors for a job Caveats Like my comment in J’s other book, just keep in mind his examples are from single family houses in a suburban setting. The principles still work in other settings, like multifamilies in urban areas, but you may need to make some tweaks here and there. 6. Every Landlord’s Legal Guide, Marcia Stewart, Ralph Warner, & Janet Portman Topics Covered Property management Legal and contracts What I Like About This Book This book is a detailed reference manual specifically for all the legal issues landlords face. It is the most recent addition to my library out of the 7 recommendations, but I wish I had it from the beginning. I like that the book is extremely comprehensive. It covers all of the normal sticky landlord legal issues like rejecting applicants, handling security deposits, and evicting tenants, but it also addresses other issues like potential liability for your property manager’s acts and how to handle subletting requests. I also like that the book has a downloadable library of forms. I don’t necessarily use all of them, but I take ideas from each as I’m having my own checklists, leases, and other contracts created. Big Ideas From the Book Lease terminations and evictions: what, why, and how How to hire a lawyer and do legal research How to solve disputes without a lawyer Returning security deposits and other move-out issues Potential landlord liability: the potential sources (like tenant injuries, health hazards, criminal activity, etc) and how to address them Delegating (legally) responsibilities to tenants State-by-state landlord-tenant law charts (to highlight similarities and differences) Caveats I basically look at this book as my cheat-sheet or place to start for any legal questions about rental contracts, evictions, changing a lease, or other issues that may come up. It does not replace a good attorney on your team. But a resource like this is very helpful even when you hire an attorney because I’ve found that you must have some basic knowledge before you can even ask the right questions to an attorney or another expert. So this book helps with that. 7. Landlording on Autopilot by Mike Butler Topics Covered General principles and strategies Property management Legal and contracts What I Like About This Book The author Mike Butler is a funny guy, and he also provides a lot of great property and business management ideas and systems in this book. There are a lot of different approaches to property management, and Mike has one particular style. His strategy is geared more towards single family houses and hands-off self-management. You may not choose to adopt every single method he suggests, but I think it’s one of the best books for its mix of practical, nitty-gritty details of management systems, funny and eye-popping stories, and also general big-picture strategy for investing success. Big Ideas From the Book Virtual offices and management systems (like online payment, answering services, websites, etc.) The “rent talk”: a thorough, step-by-step meeting to train tenant before signing lease Treat tenants like “employees” (because they have a job to do) All-star program incentives to encourage tenants to stay longer New tenant welcome package and goody bag Tenant move-out checklist and package Key and lock system List of fees for items broken or not done when tenant moves out Landlord toolbox: a list of everything you need to run landlording business Caveats I was a bit skeptical after reading chapter one because Mike began with the idea of using “conservative” 5 percent appreciation rates in his town to build a large net worth. Perhaps Mike did experience 5 percent appreciation every year on his properties, but on a national scale, house appreciation tends to be the same as inflation (about 3 percent over the long run). But be very careful counting on any specific appreciation rates as part of your wealth building plan. Doing this can be dangerous because it takes your focus away from the investment fundamentals you can control, like cash flow and loan amortization. Appreciation for me is a bonus that I'll happily profit from when it comes, but I don't calculate it up front. To Mike's credit, he did follow in the rest of the book talking mostly about cash flow, tax benefits, and great management systems. Related: Newbies: These 3 Simple Steps Will Prepare You For Your First Deal What Are You Reading? “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero. You’d be amazed at how much Warren [Buffet] reads — and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.” Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Charles T. Munger, Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger What you choose to read and put into your mind is an important choice. I hope this list has helped you to focus on a small group of real estate books that have been very helpful to me. [Editor’s Note: We are republishing this article to help out our newer members.] What do you think about these choices? Are there others that you would include? What are you reading now in the real estate and business world that has been helpful? I’d love to hear from you in the comment section below.