All About Real Estate Investing: The Easy Way to Get Started

251 Pages·2001·1.62 MB·English

by  William Benke

ALL ABOUT
REAL ESTATE
INVESTING
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ALL ABOUT
REAL ESTATE
INVESTING
The Easy Way to Get Started
WILLIAM BENKE
JOSEPH M. FOWLER
Second Edition
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Copyright ©2001, 1995 by William Benke and Joseph M. Fowler. All rights reserved. Manufactured in
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DOI: 10.1036/0071420584
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C O N T E N T S
Preface vii
Chapter 1
Why Real Estate? 1
Chapter 2
Better a Debtor Be! 7
Chapter 3
What You Need to Know About Profitability 15
Chapter 4
Which Type of Real Estate? 21
Chapter 5
Rental Houses 29
Chapter 6
Lease/Option Strategy 71
Chapter 7
Apartment Houses 79
Chapter 8
Tenants 117
Chapter 9
Land 127
Chapter 10
Negotiating the Deal 165
Chapter 11
Group Investments or Joint Ownership 179
Copyright 2001, 1995 by William Benke and Joseph M. Fowler. Click Here for Terms of Use.
v
vi CONTENTS
Chapter 12
Using the Internet 191
Chapter 13
Real Estate Brokers 197
Chapter 14
AWord About Financing 201
APPENDIXES 211
INDEX 233
P R E FAC E
R
eal estate offers excellent investment opportunities. But for
most individuals, real estate investment is not the get-rich-quick
panacea that the multitude of seminar promoters would have us
believe. One must question why so many self-proclaimed multi-
millionaire seminar hosts devote such a disproportionate level of
time and energy to real estate seminars and related sales rather
than to real estate investment itself.
Nevertheless, many great fortunes have been started in real
estate by individuals with only modest resources. Such success, how-
ever, has usually been the result of good investment decisions rather
than unique schemes. Real estate investment decisions involve a
process that is not dissimilar from that required for other types of
investment. The investor must understand the factors influencing
profitability, assemble quantitative data concerning these factors, and
then translate the data into an assessment of probable profitability
and attendant risk.
Accordingly, a primary focus of this book is profitability
assessment—the bottom line for any investment decision. In the
case of real estate, it is often done very poorly. This is due in part to
the multitude of variables that describe real estate investment sce-
narios, including the buy terms (price, down payment, interest rate,
contract period), the sell terms (similar variables), the hold period
between buy and sell, the expected appreciation rate, the expenses
incurred to carry the property, the income produced, etc.
These variables complicate a realistic assessment of expected
profitability. However, unless such assessment is accurately per-
formed, an intelligent investment decision is not possible. Does this
mean that real estate investors must be accomplished financial ana-
lysts? Not at all. In this age of computers, most real estate firms are
equipped to provide such service, given the proper inputs con-
cerning the variables involved. However, investors must be suffi-
ciently knowledgeable concerning the fundamentals in order to
arrange for and input appropriate analysis, assess its validity, and
properly interpret the results.
Copyright 2001, 1995 by William Benke and Joseph M. Fowler. Click Here for Terms of Use.
vii
viii PREFACE
To assist in this process, we have included a unique series of
charts for rental houses, apartments, and land that permit the
investor to screen properties of interest for potential profitability
prior to a more precise or extensive analysis. All that is required is
to gather together certain basic information concerning the vari-
ables that describe the real estate investment scenario under con-
sideration, and then use the charts to translate this information into
an estimate of expected rate of return on investment.
While the book is written to accommodate less experienced
real estate investors, the profitability analysis charts will be an
invaluable reference source for even the most sophisticated investor
in screening real estate investment opportunities.
Other important subjects covered include the characteristics
of different types of real estate investment (rental houses, apart-
ments, land), selection considerations, use of the Internet in real
estate investing, individual vs. group investing, the impacts of
inflation, things you need to understand about real estate brokers,
tenant considerations, financing strategies, and negotiating strate-
gies and tactics that will further enhance prospects for a success-
ful outcome.