Customer Reviews

How to Invest in Condominiums: The Low-Risk Option for Long-Term Cash Flow

5 star:		(10)
4 star:		(3)
3 star:		(1)
2 star:		(3)
1 star:		(0)

 

 

I enjoyed Andris Virsnieks' book very much. The author writes in an informative, intelligent and down to earth style. His premise is buy brand new condos as investment rental properties, and hire a professional management company to deal with the tenants and the day to day grind. I like it. I like the premise. I like the low involvement approach, and I'm convinced that the author did what he said he did. As opposed to some OTHER real estate authors whose books belong in the fiction section. New buildings should have fewer physical problems and many of those will/should be taken care of by the builder/developer. The author has been sucessful using his techniques and for that I applaud him.

There were a few things that I was less than satified with the book. The author only bought 7 or 8 condos and the last one was in 1986. His condo purchases were only in the Seattle, Washington area and some of his experiences and therefore conclusions may not be universal. And lastly though the book was published in 2001, it appears that much of the book was written in 1997 and many of the statistics end in 1996. A re-edited version NOT referring to the last stock market downturn as being in 1987 would have been appreciated.

I've owned condominiums myself and currently still own condos. I can attest to the truth and wisdom in Mr. Virsnieks' book. He has a plan, he executes that plan, and has written good accounting of his personal path to a steady income, very little hassle and time, as well as early retirement. This is not a get rich quick book, and the author does not have the bluster of late night informercials; but this is a clear worthwhile read.

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It is obviously written for the individual that is just getting started in rental properties, but that is the intent of the book, and the author makes that very clear on the cover and forward. BUT, then he actually delivers!

I have had countless students in my passive income investment courses, and now I intend to add this easy read to my rental income properties classes as a must read!

I would have liked to see some more meat in certain chapters, such as how did he construct the financing of his purchases, and possibly a financial blueprint of his year by year ROI as he developed his portfolio. Also, there is little to no mention of the tax implications of his investments, but I can only speculate that they are great. Overall Andris Virsnieks accomplished his mission, and that was to write a "How-To" for the absolute novice!

Some of the most important and unique areas of the book involved the detailing of his condominium purchase's, and how he amased his portfolio of rental properties and the cash flow details of each. He then goes on to advise what he learned through each experience, and what he would do differently in hind sight.

Adris compares his condominium purchases with traditional single-family style homes, apartments and duplexes. He makes a strong case for the freedom associated with condominiums versus other rental real estate properties. I'm looking forward to a second edition of this book, and hopefully he will include some of the areas suggested above.

This is a must buy for anyone wanting to create passive income through rental properties.

This book is the one investment book I recommend for everyone, and certainly the one book for investing in condominiums. In concise and thorough detail, Andris Virsnieks lends his own personal experience to show not only how to get started in investing in condominiums, but explains how if properly researched they are a superior investment to apartments, the stock market, and other more time-consuming and volatile investments. This book is free of superfluous bull and get rich quick schemes, but is instead focusing on steady monthly cash flows with little maintenance through good property management. A great book.

A simple enough plan with a simple enough philosophy in an easy to read layout. What more does one need to climb the investment mountain? This book opened my eyes (and soon my wallet) to an investment strategy I'd not considered. And the icing on the cake? It's an extremely easy, nonconvoluted read.

This book is very well organized and laid out, and stylistically written. And, it's an American success story, by an author who was able to retire while still young, and who generously shares his formula for success -- very worthwhile reading. The author uses simple averages (not compounded) from a five-year period to estimate a rate of return on investment of 20.8 percent. However, from the two properties he sold his ACTUAL REALIZED rate of return is SUPERIOR to his estimate. But, the author has buried this fact in the back of the book, in small print. Condominium no. 2 (see p. 177) over the whole life of the investment realized an Internal Rate of Return (IRR) of 26.4 percent (an IRR provides a greater yield than a simple average return on investment). Condominium no. 5 (see p. 179) over the whole life of the investment realized an IRR of 12.9 percent. The weighted average investment result for these two properties is an IRR of 21.2 percent! At first glance, the difference of only 0.4 percent between the simple average rate of return of 20.8 percent and the weighted average IRR of 21.2 percent may not seem significant. But, in reality the difference is very significant, because an IRR calculation takes into account the present value of future cash flows, and a simple average rate of return calculation does not. The author was apparently not aware that in the appendices in the back of his book he had a louder drum to beat.

This is a very informative book. One of the great things about it is that the author provides his own personal investment story along with complete details on each investment. In other words, this is not mere theory, it is actual history that can be replicated by the savy reader and investor. While he was located in Seattle, I believe that any mid-sized to large city in the country (Atlanta, Phoenix, etc.) would provide the same condo investment climate today.

This is the best investment book that I have read thus far, which could mean that I haven't read enough investment books. To me, the book was a breath of fresh air, having a lot of down-to-earth, common-sense stuff. After reading it, I truly agree with the author that condominiums are a very solid, if not the best, investment. I even have a specific game plan on how to go about getting my first condo and the long term process that can make me rich if I implement it correctly, and follow the path laid out by Virsnieks.

Other business books that I have read just tell you that you have to learn to "think like the rich." These other books do not lay out a specific game plan to reach your goals. Virsnieks even gives you the details about each of his condos that he bought and gives you the exact amounts that he made on each one, and even gives figures on the ones he lost money on. He also does not tell you to be sure to buy his other books and attend his seminars so he can fill your head with more useless information and take more of your money. For this, I really respect Virsnieks. He has no hidden agenda as some other business/investment authors that I have read seem to have. He gives you a specific, easy-to-follow game plan with very attainable steps that I think just about anyone can follow.

There is one flaw that I have found with this book. Although the book was published in 2002, the author makes many references to the years 1986-1997. He never really discusses the performance of his properties beyond the year 1997, except for the fact that he added an appendix right before the book was published. Maybe this was because it took him a while to compile the info, and maybe it took a few years to get the book published after it was finished.

As the author explains, there is no get-rich-quick scheme here; it is a long process that will take a little bit of time and patience to really benefit from. But I think that's how all business works. There is no easy way out. But, using this method, you can make a lot of money and you won't have to do very much work, nor will you have to take any big risks.

This book is so easy to read and understand. After watching my stocks loose all of their gains from the last 10 years almost over night, I determined to use this investment formula for my future. The plan is straight foreword and can be applied any where you live. I have already purchased my first rental and it is paying for itself.

This is the best book for the beginning investor and for all those who ned a place to live. The author of "How to Invest in Condominiums" bought his first condominiumum as a residence rather than throw away money on rent. Hence the first principle of is invest plan to invest in a place that you yourself would live in. The second principle, as I see it, is do the research and make sure that most of the units are owner occupied. This will insure pride of ownership and ensure that your investment is protected by all the other owners. I am recommending this to book to my friends in San Diego. Those who invested or bought condominiums in 1997 are now very happy. Those who rented and invested in the booming 1997 stockmarket are now crying ower spilt milk. Even for those who are not investors but need a place to live this book is an excellent easy to follow guide to fiscal security. This is a risk free, insofar as life can be risk free, and can't lose investment guide.

I often like to read an older book on a topic of interest to me, just to see how dated it is and whether or not the principles and tenets espoused by the author still ring true after all of these years. Although this book is quite dated, apart from the basic move that the author advances in the text, many of the principles and tenets he puts forth still ring true. However, there are a number of problems with the author's investment method, especially of late, and careful readers should take note of them as they digest the contents of this book.

As for its contents, with regard to investment in real estate in general, I would have to say that it is very opinionated, but nonetheless on the money. That said, the author carefully outlines his bias for income generating condominium investing, and along the way he does a very good job of dissecting the more obvious tricks and traps (it's the not-so-obvious stuff that investors have to worry about and that he fails to present). He presents a strong- and again, very biased- case against other forms of real estate investment (and also stock and bond investing in general), such as fixer-uppers, apartment buildings, limited partnerships and real estate development (here specifically, turning raw land into some sort of residential property).

The basic move is to purchase a new or "new-ish" type condo unit in a promising development, live in it for an extended period of time, then rent it out and repeat the process. You do this until you reach the limit of what you feel is the greatest number of properties you can reasonably hold in your investment portfolio. Most of the book is spent justifying this basic move, and a little time is spent demonstrating how to implement it. Since the process is rather time-consuming, and could potentially limit the number of units you could reasonably acquire, the author proposes a variation of this basic move, in which you identify condo units in promising developments that you feel you would be comfortable living in, and then purchase one or more units in the community as rental properties.

The book mostly features the author's personal experience with this limited investment method, and relies heavily on anecdotes. The more jaded reader should take note of the following: the author wrote his how-to book around the beginning of the twenty-first century, just as the most recent real estate boom was getting underway, his experience is pretty much limited to one geographical region (Seattle-Tacoma, WA) which is itself somewhat an aberration, and most important, all of the examples he presents feature successful implementation of his basic move, with no real problems whatsoever from each of his investments. This latter point gives me cause for pause. And then there's also the problem with the numbers and metrics he presents with each of these condo investments: they do not quite add up.

The good points of the book are his fundamental advice on maintaining positive cash flow throughout, identifying investment properties that you the investor would either live in initially or want to live in, and most important, his following advice: "With limited knowledge, limit what you do." The bad points of the book are its overt implications that the investment method is pretty much effortless and problem-free (hardly the case), the basic move espoused throughout the book can no longer be applied with reasonable and consistent safety and success in these most perilous times, and many critical points are left out, such as structuring financing, coming up with a suitable property marketing plan, and most important, a lack of rigorous detail in the form of property balance sheets, cash flow and income statements.

For example, although one may be able to get around many of the headaches of property ownership by going the condo route and outsourcing many tasks like identifying suitable properties and property and tenant management- including tenant selection, to (so-called) professionals, one should realize that first, doing so comes at a cost and second, these 'professionals' will inevitably do what maximizes their benefit, not yours(nowadays, property managers command 8 - 15% of the monthly gross rent, realtors want 3% on either side of the table, and the cost of bank financing- loan fees, closing costs and whatnot, is quite prohibitive, ranging from 6 - 15% of the purchase price, with the financing cost percentage actually going up as the purchase price goes down!). As another example, he incorrectly assumes that budding investors can avoid the deferred maintenance and repair issues typically associated with older developments and apartment-to-condo conversions by investing only in the newer condo developments. Had the author waited just a few years, he would have borne witness to the hasty construction, shoddy workmanship and third-rate parts and materials used in putting together many of the newer condo communities on the market today. The most recent boom and bust has amply demonstrated that just because a property is new or new-ish doesn't necessarily mean that it is a problem-free, all-around good deal.

Moreover, in recent times, this method strikes me as a form of fair-weather investing that's long past its optimum deployment period. Specifically, it would have worked well during the early- to middle stages of the most recent real estate cycle. Now that condo developments have been grossly over-built in many markets (indeed, many proposed condo developments either never got built, found themselves busted at some point during their construction, or got built and didn't sell- eventually being turned into so-called 'luxury apartments'), and with the tremendous overhang of new and existing vacant housing supply now on the market, going condo may not make much sense, given that anyone in a position rent has many choices and anyone looking to own- either as a home or an investment, also has numerous choices.

Also, when the boom went bust, many distressed condos were picked up by investors in cash-only deals (often at elevated prices), and with newly tight-fisted bank lending in place (and readers should take note that the author assumed the use of borrowed funds, with varying down payments, in his presentation of results), deploying this method will depend either on all cash purchasing or the use of hefty down payments (primarily because many of the newer developments, while starting out as owner-occupied communities, now are renter-dominated communities because of the antics of a wave of cash-money investors and the hordes of owner walk-aways; the banks are rightfully leery of lending in these situations).

In sum, this book book is good for a few fundamental principles, but bad as a template for successful and safe real estate investment. My advice, first to aspiring real estate investors, would be to read this book for a bit of historical commentary, and second to the author, would be to write a shorter book that focuses more on the investment method and how it performs and less on its justification, letting the metrics associated with the investment speak for themselves.