📖 The ABCs of Real Estate Investing by Ken McElroy

Topic: Real Estate Investing | Medium: Kindle | Rating: 5/5

Three keynotes

1. Research - know your target market

"The market is more important than the property." (McElory 2012)

"Too many people purchase investment real estate on a hunch or a gut feeling. And while it is important to have instincts, understand that they are the products of experience, not a right of birth." (McElory 2012)

Consider:

• Demand and supply.
• Employment.
• Infrastructure.
• Unique persona.
• The cost of homeownership far exceeds the cost of renting.

2. Due diligence & purchase

"Identifying investment property is like dating. You want to make sure you choose wisely because you will be committing time, energy, and money." (McElory 2012)

Steps:

• Verifying income, expenses (net operating income/cash flow). As well as identifying opportunities to add value.
• Determine the capitalization rate (net operating income/market value), valuation and offer price.
• Calculate the loan payment and your profit or cash on cash.

3. Maintenance - sustaining value

"Even though our job title says property manager, we are really problem solvers." (McElory 2012)

"The domino effect here is that unhappy residents create vacancies and vacancies create cash flow problems. Residents talk to one another and misery loves company." (McElory 2012)

Treat your investments like a business.