Editor’s Note: We are republishing this article after updating it to reflect the best reads for newbies as of March 2020. While many of the books listed here have not changed (they stand the test of time), we’ve added a few books that have been released since this post was originally published in 2013. Leave your suggestions in the comments below; we’ll be updating this post yearly!
At one time, even 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 seven books I would recommend to myself if I could go back in time before I began my career 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 seven 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!
The 10 Best Real Estate Investing Books in 2020
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, 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, take note of these must-reads, add them to your Amazon (or BiggerPockets) cart, and start working through them!
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.
Key Takeaways From the Book
- Buying one house at a time can make you wealthy
- Houses are your best investment
- The right rental properties 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.
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, cohost of the BiggerPockets Podcast, 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.
Key Takeaways 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.
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.
Key Takeaways From the Book
- 4 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.
Topics Covered
- General principles and strategies
- Financing
- Deal analysis (for flips)
- Finding and negotiating deals
- Systems and processes for a house flipping business (EXCELLENT!)
What I Like About This Book
I like the way the author J Scott’s mind works. Cohost of the BiggerPockets Business Podcast, 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 house flipping business. You won’t have to search around in other places to get 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!).
Key Takeaways 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 to see how he’s applied the principles in this book to the new construction niche.
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!
Key Takeaways From the Book
- 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.
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 seven 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.
Key Takeaways 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.
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.
Key Takeaways 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.
Topics Covered
- General principles and strategies
- Financing
- Deal analysis
- Finding and negotiating deals
- Property management (the basics—more covered in the companion book The Book on Managing Rental Properties)
- Legal and contracts (the basics—again, for more comprehensive coverage, check out The Book on Managing Rental Properties)
What I Like About This Book
If you’re looking to build wealth through rental properties, this book is your comprehensive resource. I like that this book gives practical advice, including personal anecdotes from Brandon on mistakes to avoid, real-life examples, and actionable pieces of advice you can immediately apply to your own investing plan.
After reading this book, you’ll feel much more confident making your first (or next) investing move, knowing mistakes to avoid, creative tips for finding great deals in any market, options for financing rental properties, and the ins and outs of DIY property management vs. hiring it out.
Key Takeaways From the Book
- Why most new investors fail (and how to avoid the same fate)
- How to find deals, even in competitive markets
- How to finance your next rental property (including by using other people’s money)
- Advice on reducing (or eliminating) taxes as a part of your investment strategy
Caveats
To truly understand the ins and outs of rental properties as an investment, you’ll want to check out The Book on Managing Rental Properties alongside this read. The Book on Managing Rental Properties will help ensure your great deal isn’t sabotaged by tenant nightmares, costly evictions, and middle-of-the-night calls. To get both of these reads bundled (and save some money), click here.
Topics Covered
- General principles and strategies
- Deal analysis
- Finding and negotiating deals
What I Like About This Book
There’s little to no chance you haven’t heard news of the coronavirus and its dramatic impact on the economic outlook. In uncertain times, smart investors begin to plan for a possible recession and look for ways to safeguard their investments.
Even though Recession-Proof Real Estate Investing was written with the ’08 recession in mind, its lessons still very much ring true for 2020 investing, should the economy continue towards a downturn. If you’re looking for peace of mind amidst today’s panic, absolutely give this book a read. You’ll walk away armed with information on economic shifts, why they happen, and the strategies most likely to help you survive (and even thrive) during a recession.
Key Takeaways From the Book
- How the economy moves in cycles (and what you should be doing with your money during each phase)
- Advice on changing course due to an impending recession
- Strategies that work during an economic downturn
Caveats
Unfortunately for those who’d like to add this to their bookshelf, Recession-Proof Real Estate Investing is only available as an audiobook or e-book.
Topics Covered
- General principles and strategies
- Financing
- Deal analysis
- Finding and negotiating deals
What I Like About This Book
I’d be remiss not to include my own book on this list, so last but not least, we have Retire Early With Real Estate. If one of the reasons you’re interested in real estate investing is to create enough passive income to ultimately leave your 9 to 5, this comprehensive guide to financial freedom is for you.
Part real estate investing advice and part personal finance guidance, this book gives actionable, step-by-step information to help you realistically retire within 10-15 years using detailed studies of investors who have done just that. Don’t just take my word for it, though—read through the reviews on Amazon!
Key Takeaways From the Book
- A step-by-step process for using rental properties to retire within 10-15 years
- Case studies of everyday people who have used real estate to retire
- How to use rental income to pay all your monthly bills
- 5-step process to create your own early retirement plan
Caveats
None, of course! 😉
Honorable Mentions
-
The Book on Tax Strategies and The Book on Advanced Tax Strategies (new in 2020!) by Matt MacFarland and Amanda Han: The U.S. tax system is full of benefits (and loopholes!) for real estate investors. It’s never to early to learn how to take advantage.
-
Rich Dad Poor Dad by Robert Kiyosaki: Likely the most recommended book on the BiggerPockets Real Estate Podcast, Rich Dad Poor Dad serves as an entry point for many readers to the real estate investing world. While it may not be comprehensive, it’s a good foundational read.
-
Long-Distance Real Estate Investing by David Greene: If you assemble the right team on the ground, you'll be able to invest pretty much anywhere with confidence. Learn how even beginner investors can start searching outside of their own backyard with this read from BiggerPockets Podcast cohost and real estate agent/investor David Greene.
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The Millionaire Real Estate Investor by Gary Keller with Dave Jenks and Jay Papasan: This book draws on advice from people who have real-life experience building multi-million dollar real estate portfolios. It’s a solid read for anyone looking to be inspired to invest. Bonus: Check out Jay Papasan’s BiggerPockets Real Estate Podcast appearance here!
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.” —Charles T. Munger, Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger
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What you choose to read and put into your mind is an important choice. I hope this list will help you focus on a small group of real estate books that have been very helpful to me.
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.