Table of Contents
Introduction 11
How to Use This Book 13
Study, Reflect, and Act 14
Part I Real Estate As An Investment 17
Chapter 1 Why Real Estate Beats Other Investments 19
Investing in Real Estate Means Owning Your Own Business 22
Benefits of Multiunit Residences and Mobile Homes 25
This Is Not a Get-Rich-Quick Scheme 28
Chapter 2 The Components of Return on Investment 31
Cash Flow 32
Appreciation 35
Equity Growth Through Loan Reduction 39
Tax Benefits 39
Chapter 3 Protect Your Personal Assets 47
Choose the Right Entity 48
Advanced Asset Protection 51
Chapter 4 Assemble Your Team of Experts 53
How a Real Estate Agent is Key 54
How a Real Estate Attorney Watches Your Back 57
How a Tax Advisor Can Keep Money in Your Pocket 59
How an Insurance Agent Can Help You Focus and Leverage 60
Optional Members of the Team 62
Chapter 5 Make a Plan 67
Determine Your Financial Goals 68
Get Started 73
Part II Buying, Financing, and Selling Investment Real Estate 75
Chapter 6 Finding Property 77
Invest Near or Far? 77
Study Your Market 78
Narrow Down the Target Areas 80
Bargains (Practically) for the Taking 81
Networks 82
Bad Figures = No Deal 82
Chapter 7 Financing the Purchase 85
The Power of Leveraging 85
How Much to Finance 86
Borrowing Money Costs Money 90
Conventional Lenders as Sources 92
The Government as a Source 93
Assumable Loans as a Source 94
Private Financing as a Source 95
Buying With No Money Down 99
When Cash is King 100
Chapter 8 Do Your Due Diligence 103
Precontract Due Diligence 104
Postcontract Due Diligence 107
Final Words on Due Diligence 112
Chapter 9 Are Fixer-Uppers for You? 115
Types of Fixer-UpperProperties 116
Keep Your Head Above Water 125
Inspect, Then Project 125
Haggle, But be Prepared to Walk 126
Avoid Over-Renovating 127
Seller Financing 127
Do it Yourself or Hire Help? 128
If Fixer-Uppers are Not For You 130
Chapter 10 Government Programs for Property Rehabilitation 133
HUD/FHA Rehabilitation Programs 134
Other Federal Programs 139
State, County, Local, and Community-Based Programs 140
Chapter 11 Mobile Homes and Mobile-Home Parks 143
The Changed Face of Mobile Homes 144
Advantages of Investing in Mobile Homes 147
Mobile-Home Parks 151
Benefits of Owning a Mobile-Home Park 154
Financing the Purchase 159
Challenges 161
The Future 164
Chapter 12 Effective Negotiation 167
Superior Knowledge 168
People Skills 168
Changes Backed by Reasons 169
Negotiation Tactics & Techniques 170
Chapter 13 Common Mistakes to Avoid 177
Ignoring the Calculator 177
Not Knowing Area Rents 178
Choosing an Inadequate Form of Ownership 178
Overpaying 179
Buying Too Much Property 180
Buying Far From Home 181
Emotional Attachment 181
Unrealistic Expectations 182
Over-Financing 182
Other Financing Pitfalls 183
Skipping the Property Inspection 184
Tenancy Errors 184
Poor Maintenance 188
Chapter 14 How and When to Sell 189
Reasons to Sell 190
Methods of Selling 191
Tax Consequences 198
Prepare the Property for Sale 200
Marketing the Property 201
Part III Managing Tenants and Properties 203
Chapter 15 Know the Law 205
Federal Fair Housing Act 205
Your State Laws 206
Your Local Laws 207
Chapter 16 Selecting Your Tenants 209
Marketing Rental Property 211
Showing the Property 211
Screening Prospective Tenants 213
Chapter 17 The Lease as Your Essential Tool 223
Self-Explanatory Terms in a Lease 224
Other Terms in a Lease 225
Final Words 236
Chapter 18 Manage Your Tenants 237
Money, Property, and Tenants 237
Existing Tenants 238
Problem Solving 239
Increasing the Rent 242
When Tenants Leave 243
Fairness Goes Far 245
Chapter 19 The Management of Properties 247
Routine Maintenance 247
Improved Cash Flow = Increased Value 250
Keep Pristine Records 256
Chapter 20 Self-Manage or Hire Management? 257
Self-Managing Your Property 259
Professional Property Managers 260
Part IV Beyond Rental Property 265
Chapter 21 Navigating in Governmental Waters 267
The Triple Whammy 267
Challenges Encountered by Owners 269
Staying Afloat 273
Conclusion 275
What You Have Learned So Far 275
Ready, Set, Go 280
Bibliography 283
About the Author 285
Index 287