Learning the basics of real estate investing a very important first step in the real estate investing journey. Without a clear understanding of the basic principles of investing, investors put themselves at a much higher risk of failure. They are setting themselves up for defeat in their real estate dealings. In fact, this may be the most important part of this entire real estate investment series. This is the first step toward a successful future in real estate investing.
A journey of a thousand miles begins with a single step. -Lao Tzu
In the introduction to this series on real estate investing, Eric Graham, a Real Estate professional at Keller Williams The Trembley Group said that real estate investing is not a get-rich-quick scheme. “Just as any solid house needs a solid foundation,” Says Brad Emond, another Keller Williams The Trembley Group Real Estate Professional, “the same is true when it comes to a real estate investment education – a solid foundation is key to a long-lasting and successful business.”
This real estate investment series is not an exhaustive study of every dimension of real estate investing, but it is the first building block of a solid foundation. It was developed to make the first step in investment real estate learning. It is an introduction to all the possibilities associated with real estate investment.
There are many ways to get a real estate investing education. It isn’t necessary to pay hundreds or thousands of dollars to learn the business. A Keller Williams Trembley Group Real Estate Professional is an excellent source of information about real estate investing in Myrtle Beach and along the Grand Strand. They regularly steer their clients to the best investment real estate information and they know to ask the right questions to help their clients move forward. Experience also has taught them, what works for one person may not work for another.
Sources of an Investment Real Estate Education
Books – An old saying goes, “Those who lead, read.” Books are fundamental in gaining an education in real estate and may be the most widespread learning method for investors. Real estate books are produced each year by the thousands, and every major bookstore in the world contains an entire section on real estate investing. Chances are if there is any way to make money from real estate, there has been a book written about it – probably several. If reading books, however, is not your thing, you are in luck. Today, we live in a world where nearly every new book is also available as an audiobook. (Try audible.com for the web’s largest selection.)
“These three books on real estate investing are three of my favorites and appear frequently on expert’s ‘lists of the best,’” says Eric. “This is a great place to start learning. Would-be investors will glean a lot of information and learn from case studies from some of the country’s top real estate investors. All of the information applies to the Myrtle Beach and Grand Strand Real Estate markets and it’s a great start.”
1. Building Wealth One House at a Time by John Schaub
John Schaub has been described as 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, investor, and lender. People often 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,” Says Eric Graham, a Real Estate Professional with Keller Williams The Trembley Group.
“This book is all about the fundamentals. Schaub covers a comprehensive strategy for achieving financial independence with residential real estate,” Says Eric. “He also gets into finding, financing, renting, and selling properties.” John covers basics like
General principles and strategies
Financing
Deal analysis (basic number-crunching)
Property management (the basics)
Legal contracts (Leases, options, and purchase contracts)
Finding and negotiating deals
“The main idea of the book is that you can begin to 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,” says Eric.
Some of the book’s main ideas include:
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
“While John spends some time talking about real estate appreciation and how it can make you rich, I would be careful,” Eric says. “Appreciation is uncertain and difficult to predict. I like a more conservative plan of cash flow and mortgage amortization. Appreciation may come, but a good deal will work without it.”
2. What Every Real Estate Investor Needs to Know About Cash Flow by Frank Gallinelli
“I love to crunch real estate investment numbers,” says Eric Graham. “If math isn’t a strong suit, real estate investing may not be a good idea. Buying properties isn’t the same as going shopping for milk, bread, and eggs. We’re talking about sizeable financial outlays on fixed assets that can’t be moved. The numbers are critically important. Much of the financial risk can be mitigated and managed with thorough financial analysis.” New Investors sometimes lose money (sometimes a lot of it!) if they don’t know how to expertly analyze deals, calculate the key factors that influence wise decisions, and manage cash flow.
Frank Gallinelli’s What Every Real Estate Investor Needs to Know About Cash Flow… and 36 Other Key Financial Measures help put all the pieces of the puzzle together. “Frank outlines the methods he uses to gather the data to make informed investment decisions, how to estimate the real value of an income property, and how to forecast the appreciation potential of properties,” Eric says. “He includes information on measuring the different returns on your investment. They are all defined and explained - internal rate of return, capitalization rate, and cash-on-cash return.” Readers will also find detailed explanations of the calculations needed to evaluate real estate deals.
The book covers
General principles and strategies
Financing
Basic deal analysis
Brad Emond says, “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, many so-called investors don’t know how to do them correctly.”
“This book is also 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,” Says Brad. “Beginners can use it to learn, and experienced investors 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
Becoming a financial detective before buying
Using 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
“Many readers may be put off by this book’s thoroughness. But I think that’s also one of the books greatest strengths. For real estate investment beginners, the challenge is to not get overwhelmed or intimidated by so many formulas and the many ways to analyze a deal,” says Brad. “Getting off to a successful start as an entrepreneur is about the math, but fear of failure or analysis paralysis can kill a beginning investor’s dream. I always recommend that my clients pick the juicy parts from this book and learn the essential, basic formulas. Then put it all into practice. My job is to support them, provide encouragement to them, find the deals, help crunch the numbers, and help negotiate the deals.”
3. The Book on Rental Property Investingby Brandon Turner
Brandon Turner is an experienced real estate investor. He is the co-host of the “Bigger Pockets” podcast, which is one of the best resources for a practical education in real estate investing.
“The Book on Rental Property Investing is a must-read primer on investing in buy-and-hold properties,” Says Brad. “It is full of takeaways that will help a new investor build a solid real estate investment foundation that will let them invest with confidence and expertise.”
This book concisely discusses the analysis of a deal and making wise choices before buying rental properties. It explains why cash flow is so important and how to find tenants that will actually take care of the rental units. The book outlines the mistakes to avoid when investing in rental properties. There are strategies for finding competitive deals and details about financing - what to consider and how to find financing to grow your rental portfolio.
The book covers a variety of topics including:
General principles and strategies
Financing
Deal analysis
Finding and negotiating deals
Property management
”The Book on Rental Property Investing is consistently #1 in Amazon’s real estate section pretty much all the time for a good reason,” says Brad. “The author has written a super-practical, step-by-step book that can help any rental property investor. And Brandon Turner is an amazing teacher. He has a knack for distilling big topics into easily digestible, easily understandable pieces.” That’s the book’s biggest strength. It breaks down the big real estate investment picture into all the little steps including finding, negotiating, financing, closing, and renting a rental property.
The book outlines
How to run real estate investments like a business, not a hobby
Reasons why many rental property owners fail
4 sample plans for building rental wealth
How to choose the best rental locations
How to find rental properties
Where to get a rental property mortgage loan approved
The Book on Rental Property Investing is focused on small, mom-and-pop investors. “For investors wanting to buy 1,000s of units, do limited partnerships, and build a huge real estate empire, this isn’t the book for them,” says Eric Graham. “This book only touches on property management, and most new investors could use more depth and details. But The Book on Managing Rental Properties by Brandon Turner and his wife Heather Turner is a good bookshelf companion and fills in those gaps nicely.”
Blogs— Blogs, especially the Keller Williams The Trembley Group Blog, can be an amazing source of information. Short for what used to call a “weblog,” blogs are written on every imaginable real estate related topic from area growth and economic trends to the hottest new developments in Myrtle Beach and along the Grand Strand. The blogs are written by professionals working in the real estate trenches of Myrtle Beach and the Grand Strand, and the expert contributors share their best tips and advice. Blogs are worth checking out and learning from. The Keller Williams The Trembley Group website is also a wealth of information.
“There a good many great real estate investing blogs out there, but these are ones that I think are the best,” Brad Emond says. “They target busy investors who are employed elsewhere, investors looking for passive income, and investors with some spare capital, looking for investment alternatives to diversify from the stock market.”
The BiggerPockets Blog – This is one of the original real estate investing blogs. It represents one of the most comprehensive resources out there on the web for the amateur or professional investor.
REtipster – This blog claims to be “Real-World Guidance for the Part-time Investor.” Seth Williams’ posts are a wealth of information but very easy to understand with actionable advice.
Just Ask Ben – Ben Leybovich is a straight shooter who had to change careers due to a medical condition and built up a 1.5m portfolio in a short amount of time. He says he’s passionate about educating and it shows in his writing.
Morris Invest – Clayton Morris and his wife Natali believe in the long term buy and hold strategy in real estate for long term wealth creation. They’ve created a nice multimedia platform and Eric Graham enjoys their content. “This couple works together to achieve financial freedom through passive income.”
HomeUnion Blog – This blog gives actionable tips for people interested in building a portfolio, one single-family residence at a time. Their infographics are on point.
Real Estate in Your Twenties – “Brandon Turner is one of the voices you hear on the Biggerpockets podcast, one of my favorite podcasts,” says Brad Emond. “This is his personal blog where he shares his strategies for creating wealth through real estate, even without much capital and at an early age.”
Memphis Invest Blog – Chris Clothier runs this blog and is the face of Memphis Invest, a business that helps people invest in turnkey real estate. “I enjoy reading the blog because it speaks to the investor looking to build a steady stream of passive income and wealth over time,” says Eric.
Coach Carson – Coach Carson has a talent for explaining real estate investing in a very practical way and it’s quite easy to follow. “After spending some time on this site, you can’t help but walk away having learned something. His goal is to help you build wealth and ‘do more of what matters in your life,’” says Brad.
Afford Anything – Paula Pant is a writer and blogger who achieved financial freedom through rental properties at a young age. She’s an avid traveler and an entertaining writer. Her goal was to develop sustainable, long-term freedom and she did it through real estate. For those who might think that rental real estate is too much work, Paula explains how she manages it with her travel and other life activities.
Financial Samurai – “Sam Dogen is one of my favorite financial bloggers,” says Eric Graham. “He’s amassed a very enviable passive income stream. A good portion of it comes from real estate. Sam has benefitted from buying in the booming San Francisco area and has smartly positioned his properties to provide increasing revenue year after year. There are a good many similarities to the Myrtle Beach and Grand Strand market.”
Mentors - Real Estate Investing Mentors are individuals who will teach and instruct based on their first-hand experience. Mentors have lived the life before and work in the investment real estate trenches. They’ve walked it, talked it, and breathed it. “Finding a mentor and learning from those who are working in the trenches every day is one of the most important steps in a real estate investing education,” says Brad Emond. “It may also be the least understood.”
Perhaps the most powerful way to learn the basics in any field is through a mentor. That’s certainly true in real estate. While there are dozens of professional real estate mentors who charge for their service, there are also millions of mentors all over the world who charge as little as a cup of coffee or nothing at all. Among them are some of the Keller Williams The Trembley Group Real Estate Professionals. The Realtors are passionate about real estate and they enjoy sharing what they know.
By getting to know a successful local real estate professional like Keller Williams The Trembley Group’s Eric Graham or Brad Emond, an investor has an opportunity to learn from someone in the field who knows everything about the Myrtle Beach and Grand Strand market. They may ultimately become a partner in building a rental real estate portfolio. Many investors find the company’s work ethic and expertise as something to be emulated.
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