The beginner's guide to real estate investing

About This Book

Part 1. Mindset + Knowledge = Wealth

Chapter 1. Start Now

Just Say No to Excuses

You Must Believe It to See It

Set Goals Now

Chapter 2. Multiple Paths to Building Wealth

Appreciation in Market Values

Inflation

Cash Flows

Mortgage Payoff (Amortization)

Buy at a Bargain Price

Create Value with Property Improvements

Improve the Neighborhood and the Neighbors

Convert the Use

Manage and Market Your Properties More Profitably

Protect Your Profits from the IRS (Tax Shelter)

Discounted Notes, Tax Liens, Tax Deeds, and Realty Stocks

Part 2. How to Raise Money

Chapter 3. Strengthen Your Credit Power

Consistency: Fast Track or Flake

Character Counts

Credit Scores Count Most

Summing Up

Chapter 4. How to Invest Using Little (or None) of Your Own Cash

Why Low-Cash Deals Magnify Your Returns

Minimize Your Down Payment with Owner-Occupant Financing

Don't Overlook FHA

Discover FHA's Best Kept Secret: The 203(k) Program

Too Many Vets Pass Up VA Loans

Even Fannie and Freddie Accept Little- or Nothing-Down Loans

Summing Up

Chapter 5. Avoid Banks, Seek Seller Financing

How to Persuade the Sellers

What Type of Seller Financing?

Try a Contract-for-Deed

Assume a Low-Interest-Rate Mortgage

"Assume" a Nonassumable Mortgage

Chapter 6. Five More Techniques to Finance Your Investments

Wraparounds Benefit Buyers and Sellers

Lease Options

Lease-Purchase Agreements

Master-Lease an Apartment Building

Chapter 7. How to Come Up with the Cash to Close

Cash Out Some of Your Current Home's Equity

Bring in Partners

Second Mortgages

Personal Savings

Sell Unnecessary Assets

Easy Money-Hard Terms

Use Credit Cards

Personal Loans

Sweat Equity (Creating Value through Improvements)

Eliminate Your Down Payment with Pledged Collateral

Student Loans

Use Creative Finance

Chapter 8. Here's How to Quality

Be Wary of Prequalifying (and Preapproval)

You Can Make Your Qualifying Ratios Look Better

The Application Itself Contains Many Clues to Your Integrity

No Preset Qualifying Income Applies to Commercial Properties

Part 3. How to Invest for Maximum Gain

Chapter 9. Twenty-Seven Ways to Find or Create Below-Market Deals

Why Properties Sell for Less (or More) than Their Market Value

Don't Dilly-Dally with Due Diligence

How to Find Bargain Sellers

Chapter 10. Make Money with Foreclosures and REOs

The Stages of Foreclosure

Approach Owners with Empathy: Step One

Some Investors Profit from the Foreclosure Auction: Step Two

The Benefits of Buying REOs: Step Three

Chapter 11. More Sources of Bargains

Federal Government Auctions

Sheriff Sales

Buy from Foreclosure Speculators

Probate and Estate Sales

Private Auctions

Short Sale Bargains

Chapter 12. Run Numbers Like a Pro

Monitor the Construction Cycle

How to Profit from the Construction Cycle

Per-Unit Measures

Gross Rent Multipliers (GRMs)

Capitalized Value

Cash Flow Returns

Create Your Own Appreciation

Chapter 13. Greatly Increase the Value of Your Investment Property

Search for Competitive Advantage

First, Verify Actual Rent Collections, Not Merely Rental Rates

Talk with Tenants

Set Your Rents with Market Savvy

Your Apartment Checklist

Give the Interior a Martha Stewart Makeover

Safety, Security, and Convenience

Rightsize the Rooms

Create More Storage

Check Noise Levels

Overall Livability

Chapter 14. Twenty-One More Ways to Push Up the Value of Your Properties

Create Strikingly Attractive Curb Appeal

Collect More than Rent

Convert a Garage, Attic, or Basement

Create an Accessory Apartment

Create a Special Purpose Use

Change the Use of a Property

Cut Operating Expenses

Gentrification and Other Value Plays

Part 4. Onward and Upward to Build Wealth

Chapter 15. Win What You Want through Negotiation

How to Define Win-Win

Know Thyself

Know the Property and Neighborhood

Know the Sellers

Establish Favorable Benchmarks

Tit for Tat

Get Seller Concessions Early

Come Ready to Buy

Ask for More than You Expect

Establish Credibility

Never Offer to Split the Difference

List Your BATNAs

Negotiate for Yourself

Leave Something on the Table

Chapter 16. Write Your Purchase Offer

No Single Contract Form

Draft Clauses with Understanding

Summing Up

Chapter 17. Craft Your Lease to Increase Profits

Achieve Competitive Advantage

Craft Your Rental Agreement

Landlording: Pros and Cons

Chapter 18. The 12 Secrets of Successful Landlording

The Good News

Hired Management versus Self-Management

Before You Buy, Verify, Verify, Verify

Prepare the Property for Rental

Craft a Winning Value Proposition

Attract Topflight Tenants

Set Up a Flawless Move-In Policy

Retain Topflight Residents

Strong Market? Raise Rents

Prepare for Special Problems

Maintain the Property

Process Move-Outs Smoothly

Persistently Seek Ways to Increase Your Cash Flow

Keep Trading Up

Internet Appendix

Index