Customer Reviews

The Insider's Guide to Making Money in Real Estate: Smart Steps to Building Your Wealth Through Property

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

 

 

Of all the real estate books that I have read or checked out and of all the real estate gurus that I have checked out, Dolf is the best.

This book goes beyond Real Estate Riches. Dolf explains h ow to purchase commercial property. He also explains how to spot property with a below-value "twist."

And there is more, like:

* No-fail mortgage application

* Purchase and sale clauses that work

* Make offers with seller appeal

* The offer; yield a bit or stand your ground?

* Settlement and possession structure

* Proposals for finance

* Ensuring that tradespeople do your jobs first

* Cutting non-performing tenants loose

My business has been primarily network marketing. Using Dolf de Ross real estate strategies has provided me with an additional stream of income as well as reducing my tax bill.

Real estate is somewhat like network marketing in that you can start with very little money, use leverage and create exponential growth.

Great book. A must read.

I purchased both this title and "The Insider's Guide to Real Estate Investing Loopholes" (same authors).

I have two primary complaints. The authors talk down to the reader, constantly making snarky comments that imply that if one doesn't act NOW, the reader is lazy, or paralyzed, or is somehow inept when it comes to business. That's not just annoying -- it's weird, and it made me suspicious of the authors' motives.

That brings me to my second complaint. The book lacks balance. I'm not saying that all of the strategies can't work -- just that it requires an ideal set of market conditions for them to work. We need to see low or declining interest rates, quickly rising tenant incomes, improving neighborhoods, distressed or at least disinterested sellers, few other investors, low insurance costs, and a plethora of service providers (such as roofers) who do great work at a low price very quickly. I can tell you that we don't have any of those factors at work now.

What we do have, at least in areas like mine, where appreciation has outpaced incomes, is a market turned on its head. Sellers will not sell because they are sitting on huge profits for the most part, and don't have to sell. Or, they believe that prices will appreciate at the same ridiculous rate that they did from 2001-2005. Numerous Dolf-inspired investors have flooded the market and bid prices up beyond all reason. Workers are in debt and don't have much money for rent. Neighborhoods where deals are affordable aren't improving, so the idea of refinancing because you painted and put up a new mailbox won't help you. Easy mortgage money has gotten anyone with a pulse into homes. Interest rates are rising, not falling. Insurance is costly and the coverage stinks. And most importantly, rents do not provide positive cash flow for most small real estate investors. I know several who actually consider themselves to be successful and the news is not good. They are carrying their properties, their properties are not carrying them! I know, it's hard to believe that this is success. But in the past few years, appreciation has bailed them out. Put that kind of leverage into effect and you are leveraging a negative, which only means you go broke faster.

A few observations: First, if making untold riches were this simple and this obvious, then so many people would attempt to do so that it would suck the potential profit from such deals down until the actual profit is more equivalent to the amount of work involved. (More about this in a moment -- because I believe that this is actually occuring in part due to all of the real estate evangelism going on.)

As they say on Wall Street: "When enough people find the key to the market, someone changes the lock!" I believe that most people reading this review are smart enough to know that markets are dynamic. Outrageous profits bring in a flood of new entrants, dramatically reducing the profit potential. If a whole bunch of new wannabe real estate tycoons start lining up to bid on properties, then the prices for those properties will rise, as will the price for the money (the financing charges in the form of interest rates). Even without a lot of new entrants, if enough people start using the same financial techniques of leverage, cost-benefit analysis, or tax strategies, then the advantages to be gained will be reduced commensurately. Common sense and basic real-world economics dictate that costs will rise and potential profits will fall. And so it is in the real estate world.

Economies of scale and technological advancements have changed many industries and wiped out others. The ability for a small business person to get a competitive bid on anything is severely limited, whether you are talking about insurance, waste collection, land, communication services, landscaping, or anything else. Big players have the advantage in negotiations and will consistently be able to lower their costs below that a single investor. They can offer their tenants more amenities and constantly remodel and update their units at a far lower cost than you or me. I can't start a profitable shipbuilding company or TV network, nor can I jump into owning large buidings over which I can spread my costs enough to justify what is increasingly becoming break-even or negative cash flow from tenants.

I am not saying that there will never again be opportunities for small real estate investors to use leverage and tax advantages to make decent money. Just that, with so many of your fellow investors looking to do the same thing, you are not going to find (DEEP BREATH HERE!): underpriced positive cash-flowing properties in undervalued neighborhoods with great potential on which you can quickly close at a dynamite interest rate that result in quickly-rented units with stable, high-earning tenants who are happy to stick around so you can quickly refinance at "massively increased property valuation" (Dolf's expression) so you can pay yourself and your investors back, raise rents even higher and go on to the next property with similar ideal parameters, plunk 10% down and do the same thing.

And no, I'm not an unmotivated individual who works harder than I have to, doesn't understand the value of money, or doesn't want financial freedom. We all want that. In Dolf's world, there are numerous individuals who can't wait to to sell you $100 for $50. My question is, if he knows how to get people to do that, why he is telling us about it? I think we all know the answer to this question.

Don't get me wrong: Eventually, the property marketplace will right itself and investment properties will come up that offer opportunity to even small investors, even with the odds stacked against you. However, it won't unlock some kind of magical door to riches. It will simply be one of many investments that helps you build LONG-TERM wealth. Real estate is just another business that goes through cycles and isn't necessarily any more of a path to fabulous riches than owning a chain of gas stations or making molded plastic products.

By the way, the most successful real estate investment firms in America have had a total return about 23% annually for the past five years through March 31, 2006. That includes dividends and share price appreciation. If that's the BEST they can do, (and I'm not saying it's bad...it's actually an amazing performance!), it's because that's the BEST anyone can hope to do, including you and me. Remember, these firms use all the leverage they can muster and have tremendous economies of scale, and the smartest tax accountants and attorneys working on their behalf. We are highly unlikely to see this performance repeated in real estate for the next five years or possibly, ever.

Footnote: I recently studied single family homes in Broward County and Palm Beach County, Florida. Over the past thirty-five years, not including taxes of any kind, residential properties have enjoyed an average annual return of 9.25% per year. Short-run performance tends to regress towards the mean. Therefore, we are virtually assured that real estate will come nowhere close to its recent performance over the next several years, particularly in a higher-interest rate environment with lots of new supply. Buyer beware!

I first learned of Dolf De Roos a few years ago from reading one of his first books that was released through the Rich Dad, Poor Dad series. I have read every one of his books and find his comments about real estate to be "right on the money". He shows you why real estate is the best place to invest and also how you can increase your profits by looking for unique situations. Very valid advice and a very good read. I highly recommend this book.

By Lex Levinrad, author of "What I Learned On Wall Street:Why Real Estate Is the Best Investment".

This Dolf de Roos book is no different from his other books, owning one is the same as owning all. Writes about same topics and ideas. Good author, trying to sell more books by using different titles.

If you don't own any of his books, worth the $20 or so for the book. However, if you do...don't waste your money/positive cash flow


Happy investing

Making Money in Real Estate, by Dolf De Roos & Diane Kennedy

Between 2000 and 2004 my partner and I purchased over 30 buildings. I remember clearly it was around the end of 2000 and I went to see Dolf in NYC, and it just so happened that I was meeting a prospective silent partner who would be putting up all the money for our 5th building. As luck would have it I had a P&L to show our prospective partner and during the seminar, Dolf asked if anyone could share some numbers on a prospective deal they are looking at. I did one better, I pulled the P&L out and Dolf went over the numbers in front of the several hundred attendees. His response was, "You guys would have to nuts not to do this deal". I am also the author of a real estate book, "A 20,000% Gain in Real Estate" (and this particular deal is explained in detail in it).

(Dolf was very informative and motivational by the way)

In the first chapter of Dolf's book are three concepts that jumped out at me; and if you can always remember them I'd say you have a great shot at making some real money in real estate. They are:

-Life is about priorities.
-Investing in real estate is all about the numbers.
-"Just Do It"

This one is so true, I just never heard it put like this:
"Every property has cash flow. The question really is, "Which way is the flowing?"

While discussing the concept delegating or hiring other people to do some of the tasks that would free you up to do deals he says, "...the three most expensive words in the English language are (Do it yourself)."

By Kevin Kingston, author of: A 20,000% Gain in Real Estate

I was a little disappointed in this book. There isn't much new information that I didn't know already. The information presented wasn't in-depth enough. It's good for people who are getting introduced to real estate.

This is one of the best real estate books that I have read. The reason is that it is a "follow the steps" book and works perfectly for beginners and would probably be equally as good for experienced investors.