Published Wednesday, December 22, 2004, in the
Published Wednesday, December 22,
2004, in the
BY
ROBERT
J. BRUSS,
Inman News
"Real Estate Investing for Dummies," by Robert S. Griswold
and Eric Tyson (Wiley Publishing Inc.,
Whether you are already an active realty investor or a beginner, you will have a
new perspective after reading "Real Estate Investing for Dummies."
This new book explains the real estate investing pro and con basics, plus
advanced techniques that experienced professionals use when deciding whether to
acquire specific residential rental or commercial properties.
Co-author Robert S. Griswold contributes his property management and investing
experience while co-author Eric Tyson brings his financial investment
background to create an extremely useful guidebook, which is also very
profitable reading. Both writers have authored other "Dummies" real
estate books. Together they make a good writing team.
Although it takes the authors a few chapters to get "warmed up" after
explaining the realty investing basics, midway through the book they pour on the
really "good stuff" with lots of easy-to-understand, "how
to" investment essentials.
Even if you are just thinking about buying rental house investments, don't miss
the "due diligence" material about how to thoroughly inspect a
property after your purchase offer has been accepted by the seller but before
the sale closes.
The sidebar examples, mostly from Griswold's many years of property management
and investing experiences, add a realism perspective to illustrate the topics
under discussion. I'm certain Griswold had lots more personal experience stories
to share, as he did in his earlier "Property Management for Dummies"
book.
This new book takes the buyer's viewpoint, often explaining property seller
tricks. For example, in the chapter about making a purchase offer, the authors
say: "Virtually every seller of an investment property claims that the
rents are below market. Sellers imply that instantly, and almost magically, upon
purchasing the building the buyer will be able to enhance the value of her new
investment property and improve her cash flow by merely (yet significantly)
increasing rents."
The book's best and most complete section explains the pros and cons of the
various methods of holding title to investment property. The explanation of the
relatively-new limited liability company (LLC) benefits is especially good, yet
uncomplicated. Holding investment property title in a LLC is obviously the
method the authors favor.
The chapter on property management seemed a bit biased toward hiring a
professional property manager rather than managing your own properties. Emphasis
is placed on how to select a top-quality professional manager and how to avoid
complaints, especially those involving illegal discrimination against tenants.
Although the book is light on humor, as is proper, except for the funny cartoons
by Rich Tennant (yes, that's his real name), the authors occasionally lapse into
humor attempts such as "Mold: The heir-apparent to asbestos." Then
they explain most insurance policies now exclude mold damage coverage and the
cause of mold problems is often the tenants.
Investment property owners will be glad to learn the author recommendations for
property management software. Accounting for property rental income and expenses
is never easy but readers are now informed of several computer software choices.
The tax advantages of realty investment and "exit strategies" are
saved until the book's very complete concluding chapters (probably to prevent
boredom if this material was in the early chapters). The book's last chapter
"10 Steps to a Real Estate Fortune (or a Great Second Income) nicely wraps
up the important benefits of investing in real estate while minimizing the
drawbacks.
Chapter topics include "Stacking Real Estate Up Against Other
Investments"; "Covering the Landscape of Common Real Estate
Investments"; "Building Your Team"; "Sources of
Capital"; "Financing Your Property Purchases"; "Shopping for
and Securing the Best Mortgage Terms"; "Location, Location,
Value"; "Examining Leases and Understanding Value";
"Crunching the Numbers: How Much Should I Pay?" "Preparing to
Make an Offer"; "Due Diligence, Property Inspections and
Closing"; "Landlording 101"; "Protecting Your Investment:
Insurance and Risk Management"; "More Than 10 Ways to Increase a
Property's Return"; and "10 Steps to a Real Estate Fortune."
This is a new book for serious real estate investors. It doesn't promote any
get-rich-quick scheme. Instead, it is for long-term investors who want to create
wealth one property at a time. But the authors explain the vital fundamentals,
plus their personal opinions, which serious investors need to understand. On my
scale of one to 10, it rates a solid 10.