I am one of those people who learn by doing. Before I became a full-time real estate investor, my career path led me to a company that required a working knowledge of a computer language. I needed the job, so before going on the initial interview, I plowed through all the internet tutorials I could find. The problem was, I didn’t have any actual experience and all the theory in the world didn’t seem to enhance my understanding of the program. Fortunately, the interviewer didn’t hammer me on my knowledge and I smooth-talked my way into the position. But, during my first day on the job, I had to walk the walk instead of merely talking the talk. It was time to learn on-the-fly or risk looking like a fool—and an unemployed one at that.
When I finally was able to call up the program on my new work desktop, everything immediately made more sense. Creating reports with the language became much easier after I was able to nab some hands-on experience. It usually goes that way with most new concepts I’ve taken on, including the real estate investment business.
Before I bought my first investment property, I tore through all the best books on real estate investing I could find. They made me want to jump in and start reaping the rewards right away. But, I found out that it wasn’t as easy as reading a book and parlaying those written words into a successful venture. However, I must admit that educating myself before buying, renovating, and selling homes provided me with a decent understanding of the industry.
What Are the Best Real Estate Investing Books?
When I browsed through the offerings at my local bookstore, the shelves yielded a lot of schlock as well as many useful guides and “how to” books. I sought out the volumes that emphasized logic over emotion—because after all, I believe in any business, you should wager with your head and not your heart. Here are 10 best books on real estate investing that I highly recommend before you follow my lead.
“The Book on Investing In Real Estate with No (and Low) Money Down” by Brandon Turner
Brandon Turner busts the myth that investing in real estate requires a small fortune to get started. It’s true that purchasing homes often means shelling out thousands of dollars for a down payment and closing costs, but the author suggests ways to skirt larger cash outlays. For instance, hard-money lenders that specialize in financing investment properties to rehab and sell often focus more on the appeal of the deal itself. Under the right circumstances, these private entities may provide enough money to purchase the targeted home AND complete the necessary renovations. If all the purchase and market components look good– price, location, and demand– you might be closing in days and embarking on the first step to a fruitful career in real estate investing.
While all this is true, Turner leaves out the hard truth about hard money. You should be aware that developing a relationship with a hard money lender is not just a matter of walking through their door. More often than not, they will want to see that you’ve had experience rehabbing and selling houses. They may even ask for you to show a real estate investor credibility kit to prove that you know how to manage a rehab and work a deal. All in all, this book will leave you with some good strategy ideas, but it won’t tell you the whole story.
“What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures” by Frank Gallinelli
New real estate players could be easily overwhelmed by the financial terms that get bandied about daily by seasoned investors, real estate agents, mortgage brokers, and lenders. Nonetheless, if you want to live in the world and thrive in the business, it’s probably best to gain a working knowledge of all key financial concepts, especially when those measures potentially impact your bottom line.
Frank Gallinelli lays out all the pertinent financial analytics through which solid deals can be evaluated and ongoing performance can be gauged. Overall, he puts forth the advice that a decision to buy or sell a home shouldn’t be dictated by emotion. Rather, investors should examine the transaction from a sheer numbers perspective, helping to ensure that return on investment (ROI) isn’t compromised or negated by a good feel about the prospects.
Numbers are only a part of the picture. Gallinelli doesn’t spend any time educating investors on the hands-on work it takes to successfully buy and sell investment property. Projected ROI might look great but if, for instance, you have trouble forming a relationship with contractors, even the most promising deals can go south.
“Every Landlord’s Tax Deduction Guide” by Stephen Fishman J.D.
My close friend is a former IRS agent. Whenever we get together, we find ourselves talking about taxes, much to the chagrin of our wives who continue to sip their Merlot and discuss far more compelling topics. I can’t fault our spouses’ reactions, but we can’t help it. If you’re going to invest in real estate, you must be somewhat of a bean counter as well.
Fishman agrees. He’s put together a concise analysis of all the deductions that ultimately help real estate investors understand how to legally increase net income. The book not only contains advice on how to leverage loopholes and deductions but also prevents investors from perhaps retaining too big of a pie slice, much to the chagrin of the IRS. In either case, dutifully accounting for what’s yours and what belongs to the government is a prudent business practice.
It’s prudent to know your way around taxation. However, the purchase needs to make sense in the first place. If you spend too much on a flip, deductions won’t help your margins all that much. Fishman doesn’t spend time addressing how or where to find homes in promising neighborhoods that hold solid potential ROI in the first place. For that, you’ll need a good property investor lead generation strategy.
“Building Wealth One House at a Time, Updated and Expanded” by John Schaub
In today’s society of convenience, it seems that many well-intended real estate investors want to make a lot of money quickly—reaching for the stars without first firmly planting their feet on the ground. If you casually browse the internet and or heed get-rich-quick home buying seminars, there’s a chance you’ll also get the notion that being a landlord and flipping houses are indeed an easy path to accumulating wealth.
Schaub refutes that claim while beckoning investors to keep it simple. He takes readers through a nine-step program that covers everything from negotiating deals on the front end, to maintaining cash flow on the back end. The author’s system suggests that rather than hopping on the fad-wagon, you should adopt a fundamental approach to real estate investing.
Regarding Schaub’s nine steps, one that seems to be absent involves what to do when your solo investment act needs some new blood and fresh ideas on how to turn a profit. Real estate investing can always throw a lot of twists and turns. Rather than bailing out, you’ll need people you can turn to when unexpected repairs pop up or local ordinances require more time and money on a rehab than projected. That’s where building a solid network comes in. Your network will help you learn more than even one of the best books on real estate investing can ever teach.
“The Millionaire Real Estate Investor Paperback” by Gary Keller, Dave Jenks, and Jay Papasan”
Who wants to be a millionaire? There are likely few real estate investors who don’t want to reach that mark and beyond. This trio of authors gathers stories from more than 100 successful real estate investors who tout valuable concepts such as team-building and constructing a referral network. The book also debunks myths that often prevent the average person from buying, renting, and selling homes. Keller and company figure if you can gain some sage advice from a variety of reliable sources, some of those lessons may help you manage financial and operational aspects of the business.
But, you can read about the success stories of others all day. Yet no one gets to where they are without making some formidable blunders. Anyone who says otherwise might be stretching the truth slightly. Along with what to do, the team skips what not to do. Sometimes a bad decision, such as paying too much for a multi-unit property in a sinking market, can unhinge even the most steadfast investors. One can only imagine what a glaring miscalculation might do to the psyche or the financial standing of a novice.
“The Book on Flipping Houses: How to Buy, Rehab, and Resell Residential Properties” by J Scott
By now, almost everybody has seen a house-flipping show on television. You can flip and flop with your significant other or rehab a dream house with your twin brother. (That’s catchy). Despite the message that anyone can buy, renovate, and sell houses, were it so easy, there would be no properties available to flip in U.S. markets anywhere. I don’t want to discourage the good, old American entrepreneurial spirit so, if you do throw your hat in the ring, J Scott has mapped out a plan for flipping success. His book covers topics that real estate investors must grasp, including the all-important subjects of financing the deal, managing contractors, the rehab process, and effectively staging the finished product to bring buyers to your property’s doorstep. Along with its companion edition that details estimating rehab costs, I’d consider Scott’s guide a must-read for beginners.
The thing is, most real estate investors don’t start out as such. Many corporate jobs get left behind when entrepreneurs start their own businesses to buy and sell houses. Accompanying those exits are typically a strong skill set and the author doesn’t really tackle which qualities and strengths might serve new investors well. As such, some folks might be better adapted to starting a real estate investing career than others and that’s a worthy bit of knowledge.
“Retire Rich from Real Estate: A Low-Risk Approach to Buying Rental Property for the Long-Term Investor” by Marc Andersen PhD
In his book, Marc Andersen reiterates what realistic financial consultants have been preaching for years: In a marathon, the tortoise outpaces the hare, and its thick shell allows it to weather market cycles and other threats to its security. Let’s face it—everyone wants to seal a huge deal or two that books significant profits and puts them on a permanent beach vacation somewhere in the Caribbean. Nice work if you can get it, but Andersen offers that a well-constructed real estate portfolio should involve buying and holding investment properties for long periods of time, reaping income, reinvesting those dollars in additional homes, and creating a financial legacy for future generations. That’s sound advice for real estate investors—both novice and expert.
Real estate investing doesn’t take place in a vacuum, however. You should always know what’s happening in the socioeconomic world around you. With so many dollars at stake, the focus must extend beyond local and regional markets and the author doesn’t thoroughly cover the consequences of global financial markets and how events around the world can affect an otherwise healthy real estate portfolio. Hedging against common risks offers downside protection in the event of another global financial crisis.
“Every Landlord’s Legal Guide” by Marcia Stewart, Ralph Warner, and Janet Portman
With the glitz comes the drudgery. Acquiring real property, as anyone who’s ever purchased a home will confirm, involves a boatload of paperwork. Misinterpreting or misunderstanding any of the intent in the contract language could lead to severe financial consequences, and snatch a big bite out of your ROI. Thus, you have two options: become a student of the deal’s administrative details or hire a real estate attorney—and relinquish another chunk of potential profit. The book’s triumvirate of authors helps you execute the former undertaking. The trio outlines all the legal forms needed to complete a buy or sell transaction, and since real estate laws vary greatly among the 50 states, the guide breaks down each governmental entity’s unique requirements.
Needless to say, a review of contracts conducted by an attorney is always a smart move. The authors review the legal landscape at a high level but don’t take a deeper dive into some of the unique laws on the books in markets such as San Francisco and New York City. Tenants’ rights in these cities prove to be a bit more stringent than in other markets. Alongside more global legal parameters, an analysis of local law would also prove vital to a solid ROI.
“Landlording on Autopilot: A Simple, No-Brainer System for Higher Profits and Fewer Headaches” by Mike Butler
True story: I once chased a squirrel around a frantic tenant’s apartment from 1 a.m. to 4 a.m. while the rest of my friends and family slept peacefully. Such are the joys of being a landlord. If you’ve ever met a bleary-eyed rental property owner over coffee at sunrise, you probably know that they weren’t up all night of their own choice. Managing the demands of tenants can be the most challenging endeavor a real estate investor might face.
Mike Butler outlines some innovative ways for landlords to reclaim their sanity and their cherished normal sleep patterns. The writer posits that you can remove much of stress from the rental equation by engaging tenants while also delegating some of the more onerous tasks to automated processes, such as online payments and answering services. In the digital age, technology can be leveraged to act as a viable employee without the need to exhaust funds on a full-time staff.
Technology works wonders when it works well. When systems go down, trouble ensues and Butler doesn’t provide a backup plan for when hard drives fail and internet access flames out. A marked dependence on technology requires viable alternatives to keep tenants happy and rents paid—even if you have to temporarily revert back to people and paper. That said, it helps if you start out with the best real estate software for investors from the outset.
“Real Estate Investing Gone Bad: 21 True Stories of What NOT to Do When Investing in Real Estate and Flipping Houses” by Phil Pustrejovsky
Have you ever encountered a naked individual who promises to give you the shirt off their back? Pustejovsky has, and he adds 20 more harrowing stories that give new investors insight into the seedy side of the industry. He highlights real-life stories reflecting the downside of real estate investing but that’s not necessarily a bad thing. You can and must learn from your missteps—and vow not to repeat them. In order to succeed in the real estate arena, recognize that it’s not all peaches and cream, but if you’re well-informed on risk and reward from the get-go, you can rise to the top.
There are many wheeler-dealers in the real estate arena and from the start of your career, it’s important to be sure you don’t become one of them. Aside from running afoul of the law and harming your reputation, firming up ethical, conscientious business practices spread the wealth not only to yourself but also to the contractors, real estate agents, lenders, and others with whom you’ve formed a professional bond.
Learn with a Hands-on Approach
I like reading books when I can find the time. Undoubtedly, the real estate editions I’ve digested gave me somewhat of a leg up before I started investing. Yet, I believe nothing replaces real-life experience when it comes to building a successful real estate portfolio—even the best books on real estate investing. The relationships I’ve formed with more seasoned investors and mentors have been critical to my investing success. You can’t teach experience but the experienced can teach you.
As an independently owned and operated HomeVestors® franchisee, my veteran Development Agents, along with my fellow franchisees, continually give me advice into the ups and downs of the industry. Book smarts are valuable. Rubbing elbows with a team that has helped HomeVestors® franchisees close more than 100,000 deals nationwide since 1996 is invaluable.
Contact HomeVestors® today to add a practical aspect to your theoretical side.