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Investing in Income Properties: The Big Six Formula for Achieving Wealth in Real Estate Hardcover – August 4, 2008
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From the Inside Flap
Many people think of real estate in terms of homes, but there is much more to this market. Real estate offers a powerful alternative for people seeking investment opportunities beyond the stock market. In fact, one of the best kept secrets in the country is that fortunes are being made every day in income-producing properties—not just by the rich, but by ordinary people who started off buying little apartment buildings, neighborhood shopping centers, small office buildings, and clusters of small warehouses. And even though the housing market is still in a significant slump, income-producing properties—also known as commercial real estate—remain healthy and vibrant.
Ken Rosen, a real estate investor who has bought and sold $300 million worth of investment real estate over the past thirty years, knows what it takes to achieve exceptional wealth through income-producing properties. With this easy-to-understand resource, he'll show men and women who have never invested how they can be successful. Rosen also reveals how experienced investors can find useful new ways to look at their real estate portfolios.
Divided into three comprehensive parts, Investing in Income Properties reveals the profitable six-step formula Rosen has created to capture impressive profits over the course of his successful real estate investing career.
Part One: The Basics explores the essentials of real estate investing, its unique advantages over other investments, how to overcome investment fears, ways to obtain the cash to get started, and how to find the right professionals to help build a successful portfolio.
Part Two: The Big Six Formula breaks down Rosen's time-tested real estate investment strategy and shows you how it can be used to identify and purchase the right property at the right price, arrange financing, build equity, cut income taxes, and much more. Rosen will also tell you why money is made in buying—not selling.
Part Three: Moving Forward focuses on how to handle your investment after you've closed the deal, and examines how you can increase the revenue and maximize the value of your property. Rosen uses photographs of actual properties and cites case studies of people who became rich using his approach.
Investing in Income Properties will help you become a successful real estate investor. If you come to understand the real estate industry and apply the insights found in this book, you'll begin to forge a personal path to financial freedom that could last a lifetime.
From the Back Cover
Praise for INVESTING IN INCOME PROPERTIES
"Investing in Income Properties is a cogent and well organized presentation of the principles of real estate analysis, financing, and investment. With his 'Big Six Formula,' Ken Rosen shares his knowledge and experiences on how to analyze and take advantage of commercial real estate investment opportunities. This book should be required reading in all real estate investment courses."
John S. Zdanowicz, PhD, Professor, Finance and Real Estate, and Director of the Jerome Bain Real Estate Institute, Florida International University
"Ken Rosen has a unique ability to make the most complicated seem clear and easy to follow. In Investing in Income Properties, he gives practical steps so that the reader can take action and begin or continue to build wealth by investing in income properties. This book will become the buyer's bible."
Alex Zylberglait, Associate Director, National Office and Industrial Properties Group, Marcus & Millichap Real Estate Investment Services
"Investing in Income Properties is a step-by-step approach to investing in commercial real estate. It is clear, easy reading with every base covered. This book is a great tool for both the new and seasoned investor."
Donna Abood, Chief Executive Officer, Colliers Abood Wood-Fay, Commercial Real Estate
"Ken Rosen's style is straightforward and his formula for building wealth is well grounded in the fundamentalsnothing fancy or tricky about it! He even puts the would-be investor at ease by addressing the fear factors of real estate investing. Twenty-one years into my career as a real estate investment sales broker, I have met many successful investors, but Ken Rosen clearly stands out as a savvy, self-made entrepreneurial investor who is generously sharing his wealth of knowledge and insight in this very instructive and easy-to-read book."
David L. Meline, Executive Director, Capital Markets Group, Investment Sales
Specialist, Cushman & Wakefield of Georgia Inc.
"One of the best, precise, and accurate real estate books on the market. A must-read for investors at any stage."
Scott K. Sime, Managing Director, CB Richard Ellis Brokerage, Miami-Dade County
Top customer reviews
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My reason for purchasing this was very specific - I have been studying condo conversions for a few years and had great difficulty finding public case studies on them. I have been able to glean quite a bit on certain conversions from pulling public records/deeds/etc. and reverse-engineering the implementation side, but really began searching in earnest late last year and found this book, which appeared to dedicate a reasonable amount of space to documenting the strategy, numbers, and specific details of positioning and marketing condo conversions.
This book was totally worth it for me based on the contents of Chapters 13 and 14 (Condo Conversions, and One Good Investment is Worth A Lifetime of Labor). With the case studies and examples presented, I was able to update my own plan and approach, and also evaluate earlier decisions more critically.
However, it is disappointing. For one thing, the author makes the claim that commercial properties are recession proof. Really? For the un-initiated, commercial properties are typically purchased based on cap rates. You'll take the Income that a property produces and divide it by an appropriate cap rate to determine what you will pay for the property, or what market value for the property is. As a result of the current credit crisis, risk has been re-assessed and cap rates have risen significantly across the board.
There is no doubt that cap rates have risen. Take for example a property that produces an annual income of $100,000. If you use a cap rate of 6.5% (fairly typical about a year ago), the result would be a value of approximately $1.5 million. Cap rates have risen consistently approximately 200 basis points over the past year. That same property would sell today w/ a cap rate of 8.5%. Using this cap rate results in a value of approximately $1.2 million. That is a value loss of $300,000, or approximately 20% of your value. Typically an investor would put 20% down. So if you bought this property a year ago w/ a 20% downpayment, your investment today would be gone and you could potentially be bankrupt. Does this sound like an investment that is "recession proof" to anyone?
I know my comments here sound like I am a nay-sayer. I actually am not. However this authors angles on things are simply not accurate and are clearly written to an audience that can't counter the author's points. It may be a good read for someone looking to learn more about the real estate industry. However, anyone with any existing knowledge and experience in the industry should skip this one.
One of Rosen's most interesting concepts is what he refers to as "infinity returns", whereby an investor's original equity investment can be recouped from a property without selling while at the same time retaining cash flows, both of which allow for future acquisitions of real estate. Every type of income-producing property is discussed, with varying strategies for each. But, by far the greatest gems in the book are the case studies. The author takes the reader through critical aspects of prior deals he's done, and provides real world insight on what to do - and what not to do. There's over forty years of commercial real estate experience packed in this book, and based on that alone it's worth the price.