This book is meant as a step by step guide to begin or improve making money in real estate. It starts with general education about cashflow, how real estate has a tax advantage in investments, how real estate employs leverage to accelerate your wealth’s growth, and how to organize your personal money so that you can be ready for the investment. It then lays out the process step by step, complete with checklists and goal setting. This step by step process includes defining what you want, checklists and equations to evaluate property, adding escape routes to your contracts, efficient ways to raise your property’s value on small budgets, and how to grow a powerful team.


Where I found it:
While reading “Rich Dad Prophecy”, I decided I wanted to read a book by Robert Kiyosaki’s Real Estate advisor. When I came across a book jointly written by his Tax Advisor and his Real Estate Advisor in my library’s catalogue, I put it on hold immediately.

My takeaways:
Much of the beginning discussion proves points that Robert Kiyosaki has made to me through his books many times: cashflow is king, debt can be good, real estate is ideal as it employs the bank’s money as leverage, etc. I will only list my new takeaways below.

Real estate is one of the few investment opportunities that isn’t dominated by computer analysis. Yes, there are some powerful tools in Zillow and other online sites, but you don’t have computers automatically pulling up listings, running the data, and placing offers (at least not that I know of). So far, real estate has too much of a personal, human, element to automate. This means that we can actually compete and win. The “deal of a lifetime” is available about once a week. You just have to go scope enough properties out to find it.

I was also floored by all the possible tax deductions a professional real estate investor can qualify for. It is clear from the tax code that the government wants you investing in this field. For example, any of my travel could be considered a business trip. I just have to visit a property and take notes. Not hard to do since real estate is literally everywhere. Also, the law assumes a residential home is worthless after 27.5 years. That means if you buy a $250,000 house, your depreciation deduction is about $9,000 a year! Basically, if you are paying taxes on your real estate investments, you need to have a talk with a real estate tax expert.

Commercial property was particularly interesting. I had never considered (or never knew about) many of the benefits: the tenant makes their income from the property and will likely maintain or even modernize at their own expense, the tenants usually sign longer leases, the tenant usually pays property taxes and insurance, and you can invest large chunks of money in only one property, thus simplifying your portfolio. Of course, there are some drawbacks. The vacant properties often sit longer and you usually need a 40% down payment.

Something that could help you at any point of your life is the advice they give in picking out a good team to help you. First, don’t try and do anything by yourself if you can get someone who can do it better for you. For example, instead of looking at hundreds of properties, talk to a real estate agent and give them a clear picture of what you are looking for. They look at hundreds of properties already and they will work hard for your commissions, especially if you are serious enough that you are a potential return customer. You should also ask them for good lenders, and ask them and the lenders for good tax guys and lawyers, etc. The better your network, the better you’ll be able to scale your investments. It also gives good advice on asking questions: ask them if they personally invest in real estate, what would make a good/bad client for them, what processes do they use for your job, do their clients invest in real estate… and once you have them on your team ask thought provoking questions such as “how can I prevent X” or “how can I write off X as a deduction”. Just asking them “can this be a deduction” usually gets a one word answer.

Recommendations:
I recommend this book to anyone who is on the fence or ready to cross the fence and get into real estate. It is a very easy read, leaves you motivated, and gives you first steps to follow through on your motivation. This book helps you feel ready with a plan.

I had been on the fence worrying that I could not invest in Real Estate because my location wasn’t very secure and I didn’t dare buy farther away. About 4 months later, I’m putting in my first ever offer on an investment property in a market I feel very good about (yay!).

I would also like to add a little caution. Make sure you follow the advice about different bags of money and on insurances. Make sure you have your emergency fund and several month's expenses before throwing your money into income producing assets or growth assets. Debt is powerful, but it can also bite, so make sure you “cover your assets” before you buy them.

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