Customer Reviews

Value Investing in Real Estate

5 star:		(12)
4 star:		(1)
3 star:		(2)
2 star:		(4)
1 star:		(1)

 

 

As a real estate appraiser for 20 years, I thought I knew about all there was to know about valuing properties. I generally pick up popular books on real estate just to see what kind of nonsense they're making up. Was I wrong about this one! Eldred taught me more than I had learned in a half-dozen courses I took with the Appraisal Institute. I now realize how narrowly we experts are trained (not educated). I guarantee that if you read this book, you'll know more than 95% of all real estate appraisers--and more than 99% of all real estate agents.

As an investor with 11 years left to retirement(I hope), I greatly appreciated the detailed and thoughtful way this author compared and and contrasted various investments. I like to think of myself as a smart investor who is extremely concerned about asset allocation and this book truly fills that need. Also, the book doesn't "trash" stocks. It shows that based on yield and risk, stocks will subperform well-selected income properties. It does not allege that stocks always rank poorly, nor does it claim real estate is always a great investment. Instead, it gave me the knowledge to make more profitable investments--regardless of whether I buy stocks or property. The book is extraordinarily well researched and referenced (hundreds of notes at the end of the book) for serious investors. Personally, I enjoyed reading these notes as much as the book, itself. Lots of insight into how we got to where we are and where we're going. If you decide to only browse through the real estate-stock analysis, the latter 6 or 7 chapters that focus primarily on property will give you more than your money's worth.

Were you disappointed with Rich Dad's Real Estate Riches? I was. But, here's what I was really looking for. This book fills in the details where Real Estate Riches glosses over with boring generalities. While you don't need to be a real number cruncher to understand the book's advice(the discussions read easily ), Eldred does go through the calculations to show that when you take account of all types of risks and returns, you can do much better with real estate--if you follow the principles of value investing. I also learned that to best choose your properties, you must forget the old cliche, " Buy below market", Instead, you need to focus on properties (locations) that stand the best chance of appreciating.Makes sense to me!

Then read Tyler Hicks or Carleton Sheets. You would be disappointed with this book because it doesn't promise a fast and easy path to riches. If, on the other hand, you're like me and want a clear, well-reasoned approach to buying (and improving) properties that will steadily increase in value, you should read this book. I also liked the rigorous way Eldred compared the risks and returns of stocks to real estate. Contrary to what the casual reader might conclude this book does not hype real estate as an "any time, any place, at any price" investment. Pricing and location are key. Fortunately, he covers those topics well. (P.S. I haven't read Eldred's other books, so I can't say which is best.) I can say, though, that you will learn that investing requires far more thought than you've been told. Anyone trying to save for retirement should at least read the first four chapters of this book. These chapters will open your eyes to the many fallacies that journalists and Wall Streeters spout out in sync.

Although I am relatively new real estate investor, I also have 15 years experience as a real estate attorney and am a real estate broker. I have read many, many books on real estate investments, and this is another one I have decided to buy to keep, rather than merely check out from the library for one reading.

Actually, the reason for this decision is that the first 100 pages or so, complained about by other reviewers on Amazon, is so well written and important.

We are all bombarded daily by the paid advertisements of brokerage houses, and by the "experts" on TV and in the written media, all of whom toe the party line that stocks are the sure way to build wealth, and never talk about about the much, much greater benefits of real estate investing. (I'm sure that you can guess why).

I have asked my wife that if anything ever happens to me and she needs to begin making investment decisions for herself and our young daughter without my help, she make this one of the handful of books she uses for guidance.

I am writing this review in case it might also help others to see the truth Eldred reveals about the stock market "industry" and plot their own financial success.

What do I mean by "serious investor?" I mean anyone who knows that making serious money involves something more than putting 5% of their earnings into a 401(K); I mean someone who realizes every investment faces risks (inflation, disinflation, deflation, interest rate, market, liquidity, etc.) and that they must choose their investments in anticipation of many possible futures. I know that I'm not much of a writer, but I'm trying to say that this book forces you to intelligently evaluate the path you're following to build wealth. It forces you to see that many of the everyday investing cliches can lead you to ruin. On the upbeat side,it clearly lays out how you can maximize your returns in real estate, while at the same time hedging future risks. Given that we have sixty or seventy million Americans now "investing" for retirement, kid's college, or other things, it is perfectly obvious that most cannot succeed. This is one of the most important facts this book discusses. It will really open your eyes to what it's going to take to actually accumulate that money you want. I fear my lack of literary skills doesn't do the book justice. But, at least for my money,it gave me more good sense about investing than any other book I have read.

This book opened my mind to the impossibility of everybody getting wealthy in stocks. I confess, though, I was one of those stock enthusiasts. I believed Jeremy Siegel (Stocks for the Long Run). I'm now convinced, there's no way the 401k and other touted stock plans can give 70 million boomers enough income to retire. Eldred proves it through both common sense and clearly presented number crunching. But for me, his biggest point was this: As millions of boomers begin to realize that they've been sold a defective product(stocks for retirement), they're going to turn to income properties. In fact,it's already beginning just as he predicted. So, he warns not to wait. Because just as with stocks, the price-yield for real estate is going to get worse as too much money continues to chase after too few good investments. That's the bad news for those who ignore the real world. On the bright side, his "metrics" for valuing both the present and future values(areas and properties that will show great returns) surpasses by far any other book I have read. Low risks, high rewards--they're still out there, as long as you are willing to use your enterprise and intelligence.

This book would be a lot better if the author would talk less about how bad an investment stocks are compared to real estate and more about the topic at hand. Almost 65% of the book is about how bad the stock market is. When the author finally talks about real estate, he gives some real good insight on how to buy but there is too much trash in this book otherwise.

If you read this book, you'll understand the what and why of the financial markets today. I read it in March and was able to dump my stocks with the Dow still over 10000. That was painful. I was following the "to bail is to fail" advice of my financial planner. But after serious argument, my planner could not begin to intelligently fault this book's analysis and recommendations. As to the future, I'm convinced. I feel far more confident with the properties I bought than I ever did with stocks. My cash-on-cash return (not counting appreciation)is 12 percent. Follow the advice laid out here and you're almost guaranteed wealth without risk. But do plan to invest some time as well as money. Only fools still think that plopping monthly deposits with Vanguard is all that's required to fatten one's net worth.

I know that "must read" stands out as cliche. But for investors of all stripes, this book really compares and contrasts beter than anything else I have seen. As to specifics in real estate, it does cover some of the same ground as Investing in Real Estate(Eldred and Mclean). But, nevertheless, I think you'll get a great deal more that will show you how to select properties, neighborhoods, and cities that are likely to outperform the market. Of course, that's what value investing is all about.