Review of "How to invest in real estate"

8 Replies

One of my goals that I set forth Monday the 12th was to read "How to invest in real estate and post a short summary. First, let me say that this book is by no means an all-encompassing, in-depth guide to every facet of real estate. I am most certainly not an author nor am I the authors of this book but I am fairly certain that this was on purpose. I believe this book is meant instead to expose you to the many different aspects of real estate investing and get you to, as is so well put in chapter 1, "ask better questions"

The book jumps right into the fray in chapter 1 by answering 9 of what the authors identify as the most commonly asked questions in their experience, and they are some good questions. Questions such as, "can I invest in real estate in real estate and have a full-time job", "can I invest in real estate if I have little or no money and poor credit", as well as several other questions are answered and examples given and in case you are wondering, yes, you can invest in real estate and have a full-time job, you can invest with little of your own money, and no, real estate is not a get rich quick scheme. This chapter serves to get you thinking and wanting to learn more. The authors then guide you through 9 chapters that cover things like "the horror story that is most people's lives". This hit home for me as I saw myself prior to my eye-opening read of "Rich Dad/Poor Dad" in a lot of what the authors described. This 2nd chapter explains concepts such as having a strong financial foundation, budgeting, how net worth is established as well as total profit. The 5 expense categories of a good budget are detailed as is the category flow of most people as well as category flow of the wealthy and those that understand how money works. I have to admit, I had already created a budget prior to reading this book but it was interesting reading about creating your FSP, financial spending plan, and being cautioned that if you dont have your foundation in order (your financial IQ and stewardship of money) you should not even think about investing in real estate.

From chapter 2 you move into chapter 3 where the authors lead you through "getting your ducks in a row". This includes explaining what a good real estate investment team looks like as well as detailing the different legal and financial entities that investors should be familiar with. Several action items came out of this chapter for me, including finding additional information on LLCs and subchapter S corporations. The authors do a great job explaining the concepts and giving examples as well as getting making me hungry to learn more. Chapter 4 and 5 then move you into investment niches as well as investment strategies where different investment strategies such as buy and hold, flipping, wholesaling, etc. are explained in good detail and a lot of the lingo that investors should know are introduced. Things like ROI, return on investment, the 1 and 2% test, the 50% rule, the 70% rule for flipping, as well as many others are introduced. My favorite thus far, and the strategy that I will follow, the BRRR method, is explained here as well (Buy, Rehab, Refinance, Repeat)

The remaining chapters walk you through how to find your deals, introducing you to the LAPS funnel structure for finding deals (Leads, Analysis, Propose, Success) as well as many strategies for finding leads such as driving for dollars, walking for dollars, direct mail marketing, and many more. How to fund your deal is introduced and numerous concepts are introduced and explained including traditional loans, hard money, private money, portfolio lending, syndication, and many more. There is such a large range of information and the authors do a great job of presenting the material in such a way as to make it informative and entertaining and always making you want to know more. 

By the time I finished the 9th and final chapter of this book I found that I had learned a great deal in regards to real estate investing as well as gained a newfound respect on how much I just do not know, but also a consuming hunger to learn and as the book says "get off my butt, find my most important next step, and make it happen." I have started on my path to getting my financial life in order, have chosen my next book, will be reading "Your money or your life" which was recommended to me by a fellow bigger pockets member but this book has fired me up to learn even more and put that learning into action. 

This book is a fantastic read, explains concepts in such a way as they can be easily grasped, and I would highly recommend it to anyone who is new to real estate and wants to learn how to get started as well as what real estate investing is really about. I hope this review helps someone, it has helped me to ensure that I dug deep into the book and really learned what was being taught so that I can review it. If anybody expresses interest, I will also post a review of "Your money or your life" and answer whatever questions I can, just please keep in mind that I am very new to this path, all my knowledge is book based at this point, and I have no actual deals under my belt...yet, but if I can help, I most certainly will.

@Jesse Rivera , good morning, and let me start off by saying that I am a little jealous. In 2017 I took my family on vacation on the west coast and we went through Oregon as well as Washington, the area is gorgeous and my wife and I hope to retire there. That being said, let me answer your question and give you a little background. In my "Introduce yourself post" I detailed how this past weekend, the weekend of the 9th through the 11th, I had to drive to Clayton N.C. and back to Corpus Christi, Tx. This gave me roughly 42hrs behind the wheel. This gave me ample time to listen to "Rich Dad/Poor Dad" on the drive. To say that it was eye-opening and mind-expanding would be a gross understatement. I made the decision on that drive, after a lot of introspection (I made the drive alone so I had a lot of time to really look deep into who I am as a person and the decisions I have made most of my life), that I would change my life. I got back to Corpus Sunday a little after 1 a.m., the very next day I made a list of things that had to get done and timeline in which to do them, this post was one of them. My goals for this week were as follows:

1.) Introduce myself on bigger pockets (Goal complete)

2.) Start getting my financial life in order

    a) Go through all my accounts, expenses, etc. and actually make a budget, due date  08/14(goal complete)

    b) start making changes to my lifestyle (no more spending 16 to 20 dollars a day on buying breakfast and lunch. Goal complete.)

3.) Begin to educate myself on real estate investing. (this took the form of purchasing "How to invest in real estate" and posting a review on bigger pockets both to ensure that I really dug deep into the book and understood it enough to review it and answer questions if anybody had any) due date 08/16 (goal complete)

4.) I am somewhat of a shy person and in order to force myself out of my comfort zone as well as learn more and begin to network with real estate investors, lenders, etc. I signed up for and will be attending a local real estate investor's meeting. This will be today at 11:45am and I will complete that goal

Those were my goals for this week. For next week:

1.) I will continue my path to getting my financial life in order so I can position myself for real estate investing, the due date for being debt-free and paying off the little over 38k in debt is July 1st, 2020. I was able to determine this number after utilizing a website that @Arturo Martinez III , a fellow bigger pockets member suggested. It allowed me to plot out my plan and print up a spreadsheet detailing amounts to pay on which debt and on which day to do so.

2.) I will read and review "Your money or your life". This book to was suggested by a fellow bigger pockets member. Due date for completion of book and review 08/23

3.) One of the takeaways from reading "How to invest in real estate" was to take action, always keep moving forward even through mistakes, hardships, etc. To that end, I am taking the advice of the book and will be analyzing 2 properties per day. This will be a daily goal with no end date. The more properties I analyze the better I will get and the better questions I will have, plus I get to put my pro membership to work.

I generally make my goals list on a daily and weekly basis but it is important to know where you are going so somewhat long term, I plan on closing on my first deal by July 2020 (The investment methodology I will be using is the BRRR investment method). My first deal will likely be one that needs a minimal amount of rehab so I can familiarize myself with interacting with contractors on that basis, realtors, title companies, inspectors, etc. I want to have the rehab done and deal complete no later than the end of October. Truth be told, I believe I already have my first tenant lined up already and I have spoken to my best friend about this and he seems interested in partnering with me on the first deal, even after I told him that there is a chance, a good one since it will be my first deal, that we will make no money and perhaps even lose money. He told me that the logic behind it all seems sound and that he would like to both help me along and perhaps start investing as well himself.

I apologize if this is long-winded but that is my current list of goals and steps. 

@Rigoberto Medina - how did #4 go? I remember that day 11 years ago. I went to my first REIA. I am an introvert as well and it took a lot of courage to do that. That may sound quite ridiculous to many people but I was a but imprisoned by my introversion even though I knew there was an extrovert inside waiting to come out. I even picked a career in computer programming to shield myself from having to face that reality. It took time but I gradually worked through it and have now raised quite a bit of capital over the years and have taken down some pretty big deals.

Let me know if there is anything I can help with in your introvert journey. 

PS - I tend to think that introverts have an edge in my humble opinion once they crack the code. :)

You are a rock star. You have a great mindset and have your goals in place. Take action every day and success will not be too far off.

@Arturo Martinez III , thank you very much. @Chris Jackson , unfortunately, no one showed up to the meeting, though no one showed up it was still a win, at least in my opinion. The meetup was at Bill Millar's BBQ so I got a good lunch out of it and in addition to that, I was fortunate enough to be able to buy lunch for a veteran without him knowing, so I definitely count it as a win. There are other REI groups in the area so I am going to sign up to go to them. One of them happens to be a BP group so I am very excited about that. The other is a pay to go group. It's not too bad, about $15 to attend, which I can understand, the host has costs in setting it up and all. I will sign up to be part of that group and see if I can be accepted and if it is worth the $15 (not just one big sales pitch for "I have all the secrets, give me your money and I'll share them") ill probably keep attending that one. Worst-case scenario, I'll start my own group. I teach API prep classes out of my classroom located in downtown Corpus, if it comes to it, ill use it to host an REI.

@Jesse Rivera , thank you very much for the kind words, I wish I could take credit, lol. If you were to ever meet my mom, you would know what I mean. I can't tell you how many times she would get home late at night after working 2 jobs to clean up around the house, make us dinner, and spend what little time she could with us, she is the real rock star. I was a horse's butt back then, I thought I had all the answers, in and out of trouble, but she always believed in me even when I would snap back at her and act like a real knucklehead (trust me, I wanted to use a stronger word here, lol.) In the end, it's because of her that I know what hard work and sacrifice look like and what put up or shut up looks like. She is the superstar, but again, thank you for the very kind words. I will keep going and I will post on the forums as much as I can, both wins and losses (I know there will be plenty of those), but maybe reading my posts will help someone else. 

Thank you again, and maybe I'll run into you when we come to Oregon..again, yeah, just a little jealous, lol. 

@Rigoberto Medina Thank you for taking the time to provide us such great insight on How to Invest in Real Estate. Also, thank you for sharing yours and your mom's story with us. It is very inspiring. Stay safe. 

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