(Part 2) Top products from r/RealEstate

I love this question and always get it from friends of mine. I just send them the same list of books that got me started and convinced me to pursue strictly investing in multi-family. These have all been out for some time but the fundamentals of deal analysis have pretty much stayed the same. IMO, the multi-family game is all about numbers and finding ways to add value and force appreciation.

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In no particular order (and affiliate link free), these are all easy reads and great resources to get started;

1. Investing in Apartment Buildings
   
2. Multi-family Millions
   
3. The Complete Guide to Buying and Selling Apartment Buildings
   
4. Honorable mention (non necessary commercial re but still great for learning analysis and calculating returns) Investing in Duplexes, Triplexes & Quads
   
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   These will all talk about why multi-family can work better than single family and will familiarize you with concepts such as capitalization rate, its importance, how to calculate it, gross rent multiplier, internal rate of return, cash on cash return etc.
   
   I've grown my re career as an investor over the past 16 years and am still learning new things everyday but for me there is no other tool like it that provides the potential for economic freedom.

So true, you definitely don't! It is an interesting question to think about though!

Let me give my thoughts... In the greater area here (PDX), starter homes that are not condos or townhouses range from 275k to 500k (certainly can go much higher, but they're 3,000+ sf beautiful homes in the city in a walk-able neighborhood for 500k to 650k). I am GUESSING, but I would say median suburb home in NOT a hip walk-able neighborhood here is 300k to 330k (assuming one doesn't take a new construction 4,000 sf lot 50 minutes from the city).

Using 330k, this implies a debt free income of $110,000 (at 3x income, 130,000 per year at 2.5x income). 110k a year and 130k a year household incomes are overwhelmingly dual income households. Plus, my brain tells me a dual income household would be more likely to go housepoor too and overextend (they shouldn't, the dual income trap illustrates why, GREAT book, link at end).

There are LOTS of millenial professionals here who pull 110k to 130k, they're more likely to be late 20's and early 30's though. There are even MORE millenial DUAL INCOME households who pull 110k to 130k, who could easily be mid 20's for both of them.

Anyways, that was my thinking... 330k on 75k income isn't so bad when you get a downpayment gift of 100,000 dollars and then a gift the next year too.

As an aside, because it came up, the Two Income Trap is a GREAT book: http://www.amazon.com/Two-Income-Trap-Middle-Class-Parents-Going/dp/0465090907/

Thoughts? Are most millenials buying houses above the national median dual incomes?

Take your post licensing classes right away. They are going to tell you the stuff you need to know right up front. Don't be that agent who waits until the last weeks, then spends all her breaks screaming into her cell phone because she's trying to juggle clients and at least one escrow headed south (hi!). On the other hand, learn all you can from that crazy lady.

Also take whatever your brokerage offers in the way of success classes right away. Yeah, different set of classes. If you're with Arizona Properties, it's called RE-Start. They will tell you what you need to do to manage your business, get clients, and close transactions.

As for books, I liked Champion Real Estate Agent and 1200 Great Sales Tips.

You must do some sort of lead generation every single day that you work. Doesn't matter if it's making phone calls or knocking doors or shudder putting address labels on a mailer.

Know what's going on in your market. Be able to say things like "Well, Monday we had 4580 available properties, 9330 under contract, and 4320 sold in the last 30 days. Median price on SFR was $143k and median time on market was 32 days."

If you think you might have any interest in new homes, tour all those properties. Put the brochures in a folder in your desk so you can talk about them with clients before you get in the car.

There will be many vendors who want to take your money. Don't give anybody a dime unless they can put in writing what you get before you pay them. They are counting on the fact that most Realtors are idiots.

Make sure you know where your clients come from. If you didn't call them first or they didn't come in on floor time, ask them "So, may I ask how you found me?" This will let you figure out what you are doing right and do more of it. It will also give you an excuse to stop doing (and stop spending money on) things that don't work. It will also give you a chance to thank people for referrals. If Bob sent in Mary, give Bob a call to say thanks or send him a Starbucks gift card. The advantage of calling -- other than being cheap -- is that he might tell you things that will help you and your business relationship with Mary.

Call every person in your circle of influence once a quarter. Your broker or sales coach will have a script. Ask if they need anything from you and ask if they know somebody who needs a Realtor.

Attend office meetings. You'll learn something.

Be prepared for the fact that something will go wrong in the last week of most transactions. Most of the time, it will have something to do with the mortgage. The deal isn't closed until it's recorded and the buyer has the keys in his hand. Don't spend your commission check until you have it.

Good luck!

https://meetkevin.teachable.com/

A great primer with best practices. Not affiliated with Kevin, but I like his course. Much of the content can be found for free, but his format is very helpful for content absorption.

I bought it to get my wife interested in scaling beyond our current portfolio. Our startegy is buy, rent, and hold, but many principles still apply. We are looking to get into the BRRR

For flipping specific, there are great resoueces to get schooled on flipping

The Book on Flipping Houses: How to Buy, Rehab, and Resell Residential Properties https://www.amazon.com/dp/1947200100/ref=cm_sw_r_cp_apa_i_DWCQDbD0FYHND

Flip Your Future: How to Quit Your Job, Live Your Dreams, And Make Six Figures Your First Year Flipping Real Estate https://www.amazon.com/dp/B07NNH2MSD/ref=cm_sw_r_cp_apa_i_5WCQDbEJ8YB8Z


You might find more ideas on r/realestateinvesting

Some resources, assuming no background:

• Always start with Damodaran. I'm sure has at least a simple model for income generating properties in here. http://pages.stern.nyu.edu/~adamodar/New_Home_Page/spreadsh.htm
  
  
• Most professionals won't touch real option pricing with a 20-foot pole, but if you haven't seen it yet in the context of financial modeling, here's some interesting insight on its use in a real estate context (from some quick googling; if you want more on this, feel free to ask. I did some work with it in b-school for valuing long-term projects) http://dspace.mit.edu/bitstream/handle/1721.1/33198/66144392.pdf
  
  
• You can get one of the basic textbooks on real estate from amazon for <$10 (I didn't use this in my courses, but some of my colleagues have it on their shelf) http://www.amazon.com/exec/obidos/tg/detail/-/0072977361/qid=1105640396/sr=8-3/ref=pd_csp_3/002-4843471-7710429?v=glance&s=books&n=507846
  
  From there, we'd want to know what your experiences with modeling are, what a baseline model would look like in your eyes, specific questions or problems you might have. It's clear you have some idea of this stuff, so you know it makes it easier for others to help if you have specific questions or can provide something that gives us background on how to best help/guide.
  

It is #6 + your budget is holding you back assuming your area is all $235k for 2br+1bath. The #6 ties you to an area. Generally a certain area was built up all at one time and if they were all built as 2br + 1 bathroom, that is what you will find there unless someone has expanded/renovated since. Then if all those 2br + 1bath are listed at $215k-235k trying to find something outside the base (semi-renovated, extra bedroom, extra 0.5 bath, ect), is going to cost more.

My advice, try to find #1, #2, #4 (at least a decent layout, does not need to be updated), #6 and ideally #5.

3 is not important. Actually crappy carpet can be a positive because many people can't see past it and the house sells cheaper. Pulling out carpet and putting in wood/engineered is not a big deal.

4 If you have decent layout and the cabinet boxes are ok, getting your cabinet doors refinished/painted/replaced and a new counter put down is an easy fix to make a BIG improvement.

Trying to add a 3rd bedroom or 0.5 bath can open up a huge can of worms with permits/electrical/plumbing so best to avoid if possible.

Find something with good bones in the area you like and the rest can be slowly improved as budget permits. Be sure to have a good home inspector but it is also not a bad idea to read up yourself and look for red flags as well (https://www.amazon.ca/Holmes-Inspection-Essential-Homeowner-Seller/dp/1603209298)

Good luck.

No problem. And don't worry about asking for free advice, I'm happy to do it (and thank you).

Most cut rate commission places start you out with something like $395 to list on the MLS. And then you decide what you want to pay a cooperating broker. What the cut rate place to handle the paperwork? More money. Want them to do other things? More money. They basically sell "packages" and try to get as much up front money as they can. Hell, they are in business so I don't begrudge them any of that, and they work well for some, but it can also easily become an expense above and beyond the Realtor a person ends up going to. Typically a selling agent brings you an offer and they know the lingo, and they know that you don't know. It puts you in a tough negotiating position. "Every place we've sold with an inspection like this always has the homeowner fixing it.....you know you'll have to disclose this to a new buyer, right? You can be sued if you don't!" That is where it is nice to have an experienced agent on your side to weed through the BS. So again, if you do that, you get a lawyer to check your paperwork. That is simply a must. You don't want to take on the sale of a very valuable asset, and "cheap" yourself into a bad situation because you didn't get a lawyer.

Honestly, I don't know any books out there, but there must be some. I'd just check Amazon. I don't know of any because I know the stuff already. http://www.amazon.com/House-Selling-Dummies-Eric-Tyson/dp/0470170468/ref=sr_1_4?s=books&ie=UTF8&qid=1375230833&sr=1-4&keywords=fsbo If I were doing this, I'd probably go with the old "FSBO for Dummies" book. Good reviews. And even if you do list, you will be far more informed for reading it.

Any questions you want to ask, feel free.

I'd recommend reading a few books. Before I got started, I found these particularly helpful:
Sell with Soul by Jennifer Allan
21 Things I Wish My Broker Had Told Me by Frank Cook
The Millionaire Real Estate Agent by Gary Keller- everyone swears by this one, but I didn't find it that helpful.

Good Luck

DM me I'm a commercial real estate broker at a worldwide firm that I'm not sure if I'm allowed to name, I've got some good reading material for you that helped me in my undergrad studies....

edit... I guess by popular demand here are the links to the books that I used, I'm sure you can find PDF files online.


The Due Diligence Handbook For Commercial Real Estate: A Proven System To Save Time, Money, Headaches And Create Value When Buying Commercial Real Estate

https://www.amazon.com/gp/aw/d/1511996897/ref=mp_s_a_1_2?ie=UTF8&qid=1511882652&sr=8-2&pi=AC_SX236_SY340_QL65&keywords=due+diligence&dpPl=1&dpID=51yDFxwouBL&ref=plSrch



Commercial Real Estate Analysis and Investments

https://www.amazon.com/gp/aw/d/0324305486/ref=mp_s_a_1_2?ie=UTF8&qid=1511882813&sr=8-2&pi=AC_SX236_SY340_QL65&keywords=geltner+commercial+real+estate+analysis+and+investments&dpPl=1&dpID=510xZB%2BaDUL&ref=plSrch




Real Estate Development Workbook and Manual

https://www.amazon.com/gp/aw/d/0137634919/ref=mp_s_a_1_1?ie=UTF8&qid=1511882934&sr=8-1&pi=AC_SX236_SY340_QL65&keywords=real+estate+development+zuckerman&dpPl=1&dpID=51A1M27P92L&ref=plSrch

The geltner book literally shows you every aspect of commercial real estate, there isn't much of a difference between the first and second edition if you wanna save some money.

That's a good list, BUT they should be secondary reading, sure you can get insights from them that can relate to any type of investing but you want to be RE specific right? Here is a list I would look into.

Private Real Estate Investment: Data Analysis and Decision Making

Real Estate Finance & Investments

Multifamily Housing Development Handbook

Real Estate Market Analysis: Methods and Case Studies, Second Edition

The Complete Guide to Buying and Selling Apartment Buildings

How to Pay Little or No Taxes on Your Real Estate Investments: What Smart Investors Need to Know

Investing in Real Estate

Real Estate Investing, Cash Flows, and Due Diligence: Making Better Investment Decisions (Volume 2)

What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures

That's a lot, also info in those books may over lap so pick which ones you would want to answer your specific questions. Hope this helps.

Investing in real estate really requires that you know a little about a lot of things. These are the books I used when starting up:

General Overview:

• The Wall Street Journal. Complete Real-Estate Investing Guidebook
  
• The Millionaire Real Estate Investor
  
  Multi-Family Introduction:
  
  
• Investing in Duplexes, Triplexes, and Quads
  
  Flipping Introduction:
  
  
• FLIP: How to Find, Fix, and Sell Houses for Profit
  
  Real Estate Formula Primer:
  
  
• What Every Real Estate Investor Needs to Know About Cash Flow
  
  Landlord Tax Basics:
  
  
• Every Landlords Tax Deduction Guide
  
  
  That is a good intro for books...BiggerPockets is always good too. However, most investors will tell you that there is only so much you can read about real estate. Read some books, get a feel and then go for it. It's the only way you can really learn.

I got these two books, which were extremely helpful, and written for second graders (which, is wonderful when you don't know shit about the industry!).

Mortgage Ripoffs and Money Savers

Nolo's Essential Guide to Buying Your First Home.

WARNING!!! They were written by Agents and Brokers at the height of the boom. So there is some really fucking bad advise in them, read through the lines, and cherry pick what will work for you given our new market reality.

Overall, I got enough from those books to know what I needed to make better financial decisions, but you can't be completely blind about it - even with the books.

And I heavily supplemented the knowledge that I got from the books with recent blogs and real-estate threads.

So you are in the right place!

> What kind of red flags to look out for for coops/condos?

1. Make sure you have a good lawyer who is really going to do all the necessary due diligence.
   
   
2. Read this book.

Millionaire Real Estate Investor, Gary Keller.

http://www.amazon.com/The-Millionaire-Real-Estate-Investor/dp/0071446370

There might be better "beginner books", but I think this does start at the basics and does an even better job at the more thorough and practical levels. By far the best overall book on RE investing that I have read. No nonsense approach, which is hard to come by in a world where every slick haired dude ever bought anything is trying to sell a book on "how to be a billionaire overnight with no money or assets at all!".

Beyond that there are a list of other books that hit on more specific or detailed topics, and when you need those just let me know. I could think of a few.

Read a book, HOLD: How to Find, Buy, and Rent Houses for Wealth is a good one.

I bought this book a few months ago and I think it has exactly what you're looking for:

300 Ways to Buy, Sell, or Exchange Real Estate
http://www.amazon.com/gp/aw/d/098951904X

Hope this helps. I don't stand to benefit from your purchase.

This was from a chapter in the original Freakonomics book.

> Anyone who charges for advice at a seminar isn't an expert, they're a scam artist.

Who also happened to write what I think is the best book on real estate I've ever read - Multifamily Millions - as well as the Trump book on Commercial real estate investing, and owns/operates 7500 units.

http://www.amazon.com/HOLD-Find-Rent-Houses-Wealth/dp/0071797041/ref=sr_1_1?s=books&ie=UTF8&qid=1377522043&sr=1-1&keywords=hold

Non-mobile: http://www.amazon.com/dp/098951904X

^That's ^why ^I'm ^here, ^I ^don't ^judge ^you. ^PM ^/u/xl0 ^if ^I'm ^causing ^any ^trouble. ^WUT?

found this book... thinking about ordering it just to understand the essentials:

http://www.amazon.com/Holmes-Inspection-Essential-Homeowner-Seller/dp/1603209298/ref=pd_sim_b_3?ie=UTF8&refRID=0KA0C0JH157ZXYERQM3R

https://www.amazon.com/Glentronics-Inc-BWD-HWA-Basement-Watchdog/dp/B000JOK11K/

Just bought a couple after my sump pump crapped out.

https://www.amazon.com/gp/product/B000JOK11K/

That is way cheap - normal cost is in the range of $1500 a pier, which would be $19,500.

What kind of piers are they going to put in? How will they install them?

The best are drilled concrete piers, there are other alternatives that work but are not as durable. Any of the metal piers are likely to fail within 20 years or so. To better understand the issues, read Robert Wade Brown's Foundation Repair Manual https://www.amazon.com/Foundation-Repair-McGraw-Hill-Portable-Engineering/dp/0070082448

I would NOT have the owner make the repairs, get the money and do it after closing. The warranties are usually not transferable, so you will typically get a lifetime warranty if you do it, no warranty if they do it.

Best advice is to have a PE structural engineer design the repair, then have contractors quote to do that repair, then have the PE confirm the repair was done correctly.

Most piering contractors do not have an engineer design it, they essentially exploit a loophole in the building code. Some do a decent job, but most do not. Be VERY careful in choice of contractor.