People have been making money building lasting wealth through real estate for hundreds of years. Other people have also gotten their butts kicked with real estate. This book, along with some personal insights, will help you navigate those obstacles. I’ve been lucky enough to make a couple of bucks in real estate and have had my share of bumps along the way. I will share each one with you today.
Why is this important to me?
When creating these video summaries, I always try to think from your point of view and the last thing I want to do is waste your time. This book is important if you want to escape the rat race and build a solid financial foundation for yourself and your family.
One aspect of the book talks about building the right team. This is very critical. The easiest way to accumulate wealth is through your associations and team members. The mindset here is to be the little fish in the ocean. If you can tap into billionaires and billionaires and get lessons, then that’s a good thing.
It also makes sense to study investment. As billionaire Charlie Munger says, invest, invest and invest. For those of you who don’t know, he is a partner of Warren Buffet. The wrong association can kill everything much faster than the right association.
Fortunately or unfortunately, I have some experience here. I partnered with a very talented builder. Seemed like a good fit. I had the financial need to put some money into real estate and he had the sweat talent to build. The goal was to flip and roll on larger projects. If the change did not happen, rent to achieve positive cash flow. This is a pretty basic understanding. Timing is everything. Tomorrow he promises to meet one. This classmate of mine was very talented but he had a problem. He could do 90 percent of the job in a very short time, and the last 10 percent took years. In real estate, this is a big problem because you can’t spit money out until you have a C of O (Certificate of Occupancy). This was so bad that we went through a real estate boom and bust with unfinished houses. Wasted money and time was as pleasurable as erectile dysfunction with a playboy model. Needless to say, it was bad.
This book is a great “how to” for residential real estate. Dolf touches on other types of real estate as well, but the main focus is residential. There’s a ton of information here and I’ll focus on a few key points.
1. Leverage – Leverage is a double-edged sword that must be respected. The great thing about real estate is that you can take advantage of OPM, OPE, OPT, and OPW—other people’s money, expertise, time, and labor. You want to be careful about leveraging too much debt. Dolf and Diane have great analysis tools in the book for analyzing properties. You want to be safe when investing and you need to plan for the vacancy if you are a cash flow investor. Use leverage wisely. Very smart people like Dave Ramsey were millionaires on paper and they lost it all due to too much debt. Be careful.
2. Residential vs. Commercial: This is not a big part of this book, but I want to touch on it. If you are a business owner, then one thing you absolutely can do is turn your income into property. Banks like to deal with user-occupied commercial real estate. I was lucky because our business needed more space. We were able to buy a commercial building where the space was 4 times the size and the mortgage was less than the rent. We didn’t need 4 times the size for tenants to pay for the building. This transaction is the equivalent of 20 rental houses. Better yet, we’re not dealing with people paying rent, but contracts with larger companies. The good thing about this strategy is that we are simply a monthly rent check every month with these companies that pay us rent. As you probably realize, I like commercial real estate much better than residential. This does not mean that it is better. What this means is that I am a horrible landlord. This is my weakness that needs to be remedied.
3. Deal of the Decade happens once a week 100-30-1: Dolf has a great system that will allow you to get really good at residential real estate. It is the 100-30-1 method. It basically means looking at 100 properties, making offers on 30 properties and buying 1. This sounds like a lot of work and it is, remember that a real estate business can easily replace your yearly income. This book was written during the housing boom. Therefore, he had to scour the planet for good deals. Today there are tons of good deals and if he diligently uses this method, he will be successful.
Dolf and Diane do a great job outlining how to be successful in real estate. Diane also provides ways to save money on taxes and structured settlements to protect her assets. These two have worked with some very wealthy and successful real estate investors and their insights are on display in this book. The book goes into much more detail, so if you really want to succeed in real estate, I suggest you pick up this book.
I hope you found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes a habit. Habits are formed in as little as 21 days. One thing you can take away from this book is leverage. When you take advantage of other people’s time, experience, money, and labor, you will magnify your success. An easy way to do this is to schedule 15 minutes of your time per day and learn from the best. This can be watching YouTube videos or some other method of learning. The key is to start learning and schedule it on your calendar.