Michael Blank, author of Financial Freedom with Real Estate Investing

Financial Freedom with Real Estate Investing by Michael Blank

Happy #Well-TailoredWednesday! In my crusade to learn more about real estate, I just finished reading Michael Blank's newest book, Financial Freedom with Real Estate Investing. Michael is a reputable real-estate investor in the DC area who came from a W-2 background as a software engineer and who achieved financial freedom through, you guessed it, real estate. I'm a big fan of Michael's work, which includes a podcast, events that he organizes and hosts, and an Excel model that I currently use to analyze prospective multifamily deals. I'd encourage everyone to check out his material after they read this book.

A Real Guideline to Real Estate

Michael doesn't mess around when he writes that this book is a "blueprint to quitting your job with real estate". The book is structured as a clear guideline on how to take a property down. To Michael (and to a large portion of the real estate community), the quickest way to achieve financial freedom is through buying large apartment buildings. Michael starts the book by sharing his background and dispelling some of the myths as well as benefits of buying large apartment buildings. He then walks the reader step-by-step through raising money, finding a property, and eventually closing it.

The first multifamily deal (of ANY size) results in financial freedom within three to five years.

The Law of the first deal

Michael is keen on "the law of the first deal". This law states that when an investor buys their first property, he or she will build momentum and will be able to retire in the next 3-5 years. At first I was skeptical about this point. But after reading numerous examples of people who have achieved financial freedom so quickly through this "law", I was hooked. It motivates me even more to find my first apartment building. This law is the most "theoretical" part of the book, and I mean that as a compliment, because the rest of it is very practical.

Michael Blank, author of Financial Freedom with Real Estate Investing

Overall Thoughts

Tangible, tangible, tangible. I kept thinking those words as I read this book. Michael brilliantly mixes digestible technical concepts with personal anecdotes and with specific strategies on the A to Z of buying multifamily real estate. He even provides scripts for investors to use when talking to brokers, during negotiations, or during closing. Another aspect that I liked was that Michael doesn't try to sell his other products throughout the book, unlike a certain author of Rich Dad, Poor Dad. I will definitely be looking back at this book for when I'm working on my next deal. For all these reasons, I give this book a full 5/5.

Read If You:

  • Are even mildly interested in achieving financial freedom. Regardless if you're passionate about real estate or not, this book will help steer you in the right direction.
  • Looking for a no-nonsense guideline of how to raise private money, speak to brokers, and close an apartment building deal.
  • Already invest in smaller real estate properties and want to scale up to larger investments.

Don't Read If You:

  • Are an "armchair investor" who isn't willing to take real action.
  • Distasteful of real estate gurus without wanting to keep an open mind.
  • Are a cryptocurrency or bitcoin fanatic. Real estate is a "get rich slow" tactic, not one of quick profits.

Be sure to check out my other book reviews here. Thanks for reading and please feel leave your thoughts in the Comments' section below!

Finding and Funding Great Deals by Anson Young

Finding and Funding Great Deals by Anson Young

Happy #WellTailoredWednesday! As some avid readers of this blog may recall, one of my 2019 resolutions is to invest more in real estate. Since the start of the year I've invested in an online REIT and another online real estate crowdfunding company. I've also been reading a lot about real estate...and one of the books that I just completed was Finding and Funding Great Deals by Anson Young. Anson is a successful investor from BiggerPockets and he's been a 3-peater on their famous podcast in these episodes:

Before I begin my review, I want to caveat that this is the first book that I did not read page by page and cover to cover. I skimmed many parts and reread others. The book is very comprehensive. Whether you're a beginner looking to get your feet wet or if you're an experienced landlord who's looking for tips on streamlining your process for finding deals, there's great content in the book for everyone.

Putting the Fun in Fundamentals

Showing how to narrow down the property type on ListSource. (Chapter 2)

For example, in his chapter on Market Analysis (Chapter 2), he talks about how investors can find data on leasing platforms such as Zillow, ListSource, Redfin, and the MLS. Additionally, he even adds screenshots of the filters and fields the investor should input to find what he or she is looking for. In Chapter 6 where he talks about Evaluating Deals, he goes into great detail on what to look for when analyzing comparables. From here he defines some key formulas such as the 70 percent rule, the Fixed-Cost Method, the meaning of Cap Rates, and how to use these formulas during the underwriting process. For budding investors, these fundamentals are the key to success.

Another great aspect of this book is that it's just so easy to read. Throughout the book, Anson does a great job translating both high-level and granular real estate concepts into digestible bits. He also makes the content seem more conversational by adding his wit and a ton of jokes throughout the book: "a basement in Phoenix is about as common as a day you needed a coat." (Chapter 6) or providing quotes from Groundhog Day (Chapter 1)!

Putting the Fun in Funding

In the latter part of the book, Anson focuses on how to finance deals. From the get-go, he highlights the massive tradeoff that investors face when they seek funding:

The easier-to-find options are harder to get; you could walk into any bank to get a loan, but you need to have the credit, job history, and down payment to get that loan—not to mention the appraisal, loan conditions, and thirty-day close! The harder-to-find options offer better rates and looser standards; you could find a handful of rich guys who want to earn 10 percent, could fund in two days, and never want to see your credit report or ask for a down payment. Chapter 7

This is something that I'm struggling with at the moment--getting bank financing and raising private capital from investors. I've thought about some of the ways of securing financing that Anson talks about, which include:

  • Cash
  • Self-Directed IRAs (SDIRAs)
  • Bank Financing
  • Loans--Conventional, Construction, FHA, VA, Portfolio
  • Hard & Private Money
  • Seller Financing
  • Subject To
  • Lease Options
  • Transactional Funding
  • Partnerships
  • Crowdfunding

Clearly there a lot of ways to finance a deal that I need to consider! After highlighting the pros and cons of each method, Anson then dedicates a lot of time to Negotiation.

Initiating Negotiating

One of the goals for my day job is to work on my negotiating skills, so I made sure to read up on this section intently. A key nugget of advice Anson provides is for investors to get comfortable with hearing "no". In other words, the sooner they can overcome the fear of hearing "no", the better equipped they will be in handling those objections.

Go out in the world and get to ten nos as fast as possible. Chapter 8

In addition, Anson talks about how negotiation doesn't always have to be financially-driven for a discount off the sales price. This is usually the main reason sellers say "no" in the first place. Sometimes the investor simply needs to solve the seller's problem. Some of these creative concessions include closing quickly, providing moving assistance to the seller, allowing the seller to carry-back the note, and more, all of which I found to be incredibly helpful. In the future I plan to read one of the best-known negotiating books: Never Split the Difference by Chris Voss as well as the [in]famous The Art of the Deal by Donald Trump, so stay tuned to those reviews!

How to scale your business by optimizing your marketing budget (Chapter 11)

Anson also does a great job on spending time on the logistical procedures of closing the deal. This is by far one of the most dense stages of the acquisition process. From describing the different contracts that could be used (Chapter 9) to finding an investor-friendly Title company or attorney, Anson walks the reader through several nuances he or she should watch out for.

To close out the book, Anson zooms out and talks about the big picture. Chapter 11 provides tangible tips on how investors can successfully scale their business by building processes. Consequently, the investor will find better deals at a great price and will be able to secure funding. As a budding investor, I appreciated him providing this advice because it gives me a clearer path ahead in my investing career.

Overall Thoughts

In summary, I enjoyed reading this book, although I don't think investors need to read every page cover to cover. I give it a full 5/5.

Read if you:

  • Are having trouble sourcing deals or finding financing.
  • Are looking for a manual on real estate investing. Anson does a great job of highlighting the step-by steps needed to become successful in the business.
  • Are looking to scale your business by building systems and negotiating to find better deals.

Don't Read if You:

  • Focus on multifamily or commercial real estate. While there are nuggets of information on best practices for real estate investing, I would say 80% of this book is catered to those investors who focus on Single Family or Fix & Flip.
  • Are skeptical on real estate investing in the first place. If you still need convincing, you may want to consider reading Rich Dad, Poor Dad by Robert Kiyosaki first.
  • Already have a full-fledged real estate business. I highly doubt Grant Cardone will find anything new from this book. If you're like him, you may want to read about optimizing your business or about some of the more advanced real estate investing strategies.

If you're interested in buying Finding and Funding Great Deals, you can purchase it on BiggerPockets here. Thanks for reading and please feel free to leave your thoughts in the Comments' section below!

Commercial Real Estate Investing for Dummies by Peter Conti & Peter Harris

Happy #WellTailoredWednesday! As 2018 winds down, I've been thinking about my goals for next year. One of them is to get involved with commercial real estate investing (CREI) in some capacity. Maybe it's actually owning a building outright. Or simply investing in a REIT. Whatever the case is, I just want to jump into this asset class. I've been reading a few books and listening to a TON of podcasts on real estate investing (more on those in another post!) and one of those books is this one---Commercial Real Estate Investing For Dummies by Peter Conti and Peter Harris. Let's dive in!

An Overview of Commercial Real Estate Investing

Like many of the other "For Dummies" books, this one is designed as sort of like a manual of commercial real estate investing. There are chapters that talk about the benefits of CREI and how to get started finding and making deals. The book also highlights the nitty gritty details of financing and owning and operating the investments. Lastly, there is emphasis on how investors can scale their business to be sustainable for the long-term.

Commercial real estate investing can be very lucrative and CRE tycoons often make the news: many of us have heard of some of the more [in?]famous real estate investors such as Robert Kiyosaki, author of the best-selling "Rich Dad, Poor Dad", Larry Silverstein, owner of the World Trade Center, and of course, Donald Trump, developer and current U.S. president. There's a reason why the rich love real estate: it can offer a diversified stream of income outside of the stock market, it can be a tax shelter, and it can be bought using leverage. These same reasons also make commercial real estate investing alluring to the average Joe Snehann!

Useful Advice and Tangible Tips

What I really enjoyed about this book was that the authors support their advice with reason, statistics, and real-world examples. For example, there are some great tips on building and maintaining a rolodex of potential investors, including a word-for-word script readers can use to build their own network (Pg. 78). It all sounds so easy...but the authors make it clear to readers that building that rolodex comes from a lot of hard work spent on networking and maintaining relationships.

There are even moments throughout the book where the authors talk about mistakes they made and how they lost a lot of money because they failed to educate themselves properly. And it's not just the authors. The book features short parables of other investors who lost money and recovered by following the straightforward advice provided.

Education is key. And one of the real-world tips the authors talk about is around the 1031 exchange (Pg. 303), which can be very useful to commercial real estate investors, but only if they're very meticulous about its strict requirements. Such advice is refreshing from that of the other real estate "gurus", who promise prospective investors a life of sipping margaritas on a beach...just as long as those investors pay $50,000 to sign up for their course! It's reassuring to know that even though the authors are both successful investors, they went through their series of mistakes.

Peter Harris, co-author of Commercial Real Estate Investing for Dummies, gives an overview of the book.

Overall Thoughts

Overall, I really enjoyed reading this book. While I found some sections to be a bit dry, most of the book was very informative and digestible. For these reasons, I would give it a rating of 4.5/5.

Read If You:

  • Would like a 101 of the different opportunities in commercial real estate investing
  • Currently invest in single family housing and would like to expand into commercial investing
  • Read one of Peter Conti's or Peter Harris's other books (review coming shortly!)

Don’t Read If You:

  • Are an intermediate or experienced commercial real estate investor looking for more advanced strategies
  • Like the "traditional" vehicles of investing, such as stocks and bonds, or the speculative vehicles, such as crypto or private companies and are unwilling to change your opinion on why CREI is "too risky"
  • Are not willing to put in the time and hard work into learning the ins-and-outs of commercial real estate investing. If you think CREI will immediately lead you to sipping margaritas on a beach, stay far away from this book!

Thanks for reading and please feel free to leave your thoughts in the Comments' section below!