The Book on Rental Property Investing : How to Create Wealth and Passive Income Through Intelligent Buy & Hold Real Estate Investing will likely ruin your life, as great books tend to do. It will challenge the way you look at life, finances, and real estate. It will lead you to envision a different life for yourself, one not suggested by your parents, society, your alma mater, or the media. It will encourage you to step out and create a whole new path for yourself, one that you construct out of thin air. It will introduce you to numerous ideas, paths, strategies, and concepts for achieving financial freedom through rental properties.
Category: Personal Finance
Author: Brandon Turner
Language: English
Free Download link: At the end of the post
Introduction- The Book on Rental Property Investing PDF
From the author
This book will likely ruin your life, as great books tend to do. It will challenge the way you look at life, finances, and real estate. It will lead you to envision a different life for yourself, one not suggested by your parents, society, your alma mater, or the media. It will encourage you to step out and create a whole new path for yourself, one that you construct out of thin air. It will introduce you to numerous ideas, paths, strategies, and concepts for achieving financial freedom through rental properties. It will give you answers to questions you never knew to ask, and likely leave you with a few more questions I didn’t think to answer (but don’t worry, that’s not a bad thing).
My goal with this book is to create the single greatest guide on rental property investing ever written. Trust me, I’ve read hundreds! In each chapter, I will explore one specific step in rental property investing, explaining it in depth and helping you understand how to navigate every stage of the process.
Whether you are just getting started or already own hundreds of units, I hope this book will help you make more income, retire sooner, unlock more free time, amass more units, or achieve whatever other goals you might have. Yes, this is an ambitious undertaking, but I am up for the challenge. Are you?
Finally, I believe one pass through this book will not be enough. I include so many lessons, tips, stories, and details that you’ll likely remember only 20% of what you read. Do you want to be only 20% prepared to take on your first (or next) rental property investment? I didn’t think so! I therefore encourage you to read this entire book not just once but multiple times. You’ll never look back at your life and say, “I sure wish I hadn’t spent so much time preparing for my future.” As good ole Abe Lincoln reportedly remarked, “Give me six hours to chop down a tree, and I will spend the first four sharpening the axe.”
It’s time to sharpen your axe. I’ll see you in Chapter 1.
Your friend,
Brandon Turner
Table of Contents- The Book on Rental Property Investing PDF
PROLOGUE
WHAT DO YOU WANT?
ABOUT ME
ABOUT THIS BOOK
CHAPTER 1 – WHY I LOVE RENTAL PROPERTIES
WHY DO I LOVE RENTAL PROPERTIES SO MUCH?
THE FOUR WEALTH GENERATORS
HOW MUCH MONEY DOES ONE NEED TO INVEST IN RENTAL PROPERTIES?
TOP FIVE DIFFICULTIES OF RENTAL PROPERTY INVESTING
BUT I DON’T WANT TO FIX TOILETS AT 2:00AM!
WHY DO SO MANY RENTAL PROPERTY OWNERS FAIL?
QUITTING (OR NOT QUITTING) YOUR JOB THROUGH RENTAL PROPERTIES
WHAT NEXT?
CHAPTER 2 – THE FIVE KEYS TO RENTAL PROPERTY SUCCESS
1. THINK THE RIGHT THOUGHTS
2. STUDY THE RIGHT SOURCE
3. PICKING THE RIGHT PLAN
4. ACQUIRE THE RIGHT ASSET
5. MANAGE THE RIGHT METRICS
CONCLUSION
CHAPTER 3 – FOUR SAMPLE PLANS
PLAN 1: HOW TO MAKE $1,000,000 THROUGH RENTAL PROPERTIES
PLAN 2: BUILDING WEALTH THROUGH SINGLE-FAMILY HOMES
HOUSE HACKING
HOW TO MAKE $100,000 PER YEAR USING THE BRRRR STRATEGY
CONCLUSION
CHAPTER 4 – THE TEN MEMBERS OF YOUR REAL ESTATE TEAM
1. SPOUSE
2. MENTOR/ACCOUNTABILITY PARTNER
3. REAL ESTATE AGENT
4. LENDER(S)
5. CONTRACTORS AND HANDYMEN
6. BOOKKEEPER
7. CPA
8. LAWYER
9. INSURANCE AGENT
10. PROPERTY MANAGER
CHAPTER 5 – ANALYZING A RENTAL PROPERTY
HOW TO ANALYZE A RENTAL PROPERTY
WHAT IS CASH FLOW?
123 MAIN STREET ANALYSIS
PUTTING IT ALL TOGETHER
CHAPTER 6 – INVESTING WHILE LIVING IN AN EXPENSIVE AREA
ARE YOU LOOKING FOR HOMES ON SALE?
IS THE PRICE RELATIVE?
WHAT IS WORKING IN YOUR AREA?
HAVE YOU CHECKED THE OUTSKIRTS?
INVESTING IN AN EXPENSIVE AREA: WRAPPING IT UP
CHAPTER 7 – TYPES OF RENTAL PROPERTIES
SINGLE-FAMILY HOMES
MULTIFAMILY REAL ESTATE
CONDOS
TOWNHOMES
REOS/FORECLOSURES
FIXER UPPERS
FIVE QUESTIONS TO ASK BEFORE INVESTING IN A FIXER UPPER
COMMERCIAL REAL ESTATE
WRAPPING IT UP
CHAPTER 8 – LOCATION, LOCATION, LOCATION!
NEIGHBORHOOD CLASSES
CRIME
DRUGS
SCHOOLS
JOBS VERSUS UNEMPLOYMENT
POPULATION GROWTH
HOUSING STARTS AND BUILDING PERMITS
TRANSPORTATION
PROXIMITY TO LOCAL BUSINESSES
PRICE-TO-RENT RATIO
VACANCY RATE
PROPERTY TAX AND INSURANCE RATES
MOVING ON
CHAPTER 9 – HOW TO FIND RENTAL PROPERTIES
1. THE MLS
2. DIRECT MAIL MARKETING FOR DEALS
3. DRIVING FOR DOLLARS
4. EVICTION RECORDS
5. BIGGERPOCKETS MARKETPLACE
6. CRAIGSLIST
7. WHOLESALERS
8. PASSION
CONCLUSION
CHAPTER 10 – WHICH PROPERTIES MAKE THE BEST RENTALS?
EIGHT PROBLEMS I LOOK FOR WHEN SHOPPING FOR RENTAL PROPERTIES
3 PROBLEMS I AVOID WHEN SHOPPING FOR A RENTAL PROPERTY
WRAPPING IT UP
CHAPTER 11 – SUBMITTING YOUR OFFER
HOW TO MAKE AN OFFER
THE EARNEST MONEY DEPOSIT
WHAT SHOULD THE OFFER INCLUDE?
HOW MUCH SHOULD YOU OFFER?
16 TIPS FOR GETTING YOUR OFFER ACCEPTED
WRAPPING IT UP
CHAPTER 12 – REAL ESTATE NEGOTIATION
THE NEGOTIATION PROCESS
WHEN TO NEGOTIATE
13 TIPS FOR SUCCESSFUL NEGOTIATION
CONCLUSION
CHAPTER 13 – FINANCING YOUR RENTAL PROPERTY
ALL CASH
CONVENTIONAL LOANS
PORTFOLIO LENDERS
OTHER CREATIVE METHODS
CONCLUSION
CHAPTER 14 – HOW TO GET A LOAN APPROVED, GUARANTEED
UNDERSTANDING HOW A LOAN WORKS
THE 12-DIGIT CODE YOU NEED TO GET YOUR LOAN APPROVED
MAKE YOUR LENDER’S JOB EASIER TO GET YOUR LOAN APPROVED
MOVING ON
CHAPTER 15 – THE DUE DILIGENCE PROCESS
WHAT IS DUE DILIGENCE?
CONCLUSION
CHAPTER 16 – GETTING READY TO CLOSE
ORDER INSURANCE
DO I NEED AN LLC?
FINAL WALK-THROUGH OF THE PROPERTY
PLAN THE REHAB
SIGN THE DOCS
WRAPPING IT UP
CHAPTER 17 – MANAGING YOUR RENTALS (PART I)
SELF-MANAGEMENT VERSUS PROPERTY MANAGEMENT
BUSINESS OR HOBBY: GETTING IN THE RIGHT MINDSET
GETTING A PROPERTY READY TO RENT
FIVE WAYS TO FIND GREAT TENANTS
ACCEPTING PHONE CALLS
SHOWING THE PROPERTY TO TENANTS
THE APPLICATION PROCESS
WRAPPING IT UP
CHAPTER 18 – MANAGING YOUR RENTALS (PART II)
MAINTENANCE AND REPAIRS
LANDLORD VERSUS TENANT RESPONSIBILITIES
ANNUAL PREVENTATIVE MAINTENANCE
DEALING WITH DIFFICULT TENANTS
TRAINING YOUR TENANTS
1. LATE RENT
2. NEIGHBOR CONFLICTS
3. MOVING IN UNAPPROVED PETS OR PEOPLE
4. BREAKING A LEASE
5. DRUGS
IF YOU ARE UNHAPPY, YOUR SYSTEM IS BROKEN
CHAPTER 19 – EXIT STRATEGIES AND 1031 EXCHANGES
HOLD FOREVER
SELLER FINANCING
CASH OUT
THE 1031 EXCHANGE
WRAPPING IT UP
CHAPTER 20 – FINAL THOUGHTS
THE FIVE SUCCESS PRINCIPLES OF RENTAL OWNERSHIP
WILL YOU TAKE ACTION?
ABOUT THE AUTHOR
MORE FROM BIGGERPOCKETS
SUMMARY
CHAPTER 1: WHY I LOVE RENTAL PROPERTIES
- He loves rental properties because you can leverage someone else’s money for potential greater return
- It allows you to buy larger properties for far less cash then you might need to purchase stocks or other investments
- One reason why it’s good is because insider trading is legal, meaning you can leverage information not well known to your vantage
- Also, you can make money without you there
- When you have to make money by being there, that’s called a job
- Rental properties take it advantage of four sources of wealth generation:
- Appreciation
- Cash flow
- Tax savings
- Loan pay down
- Appreciation is an increase in the value of an asset overtime
- Natural appreciation versus forced appreciation
- Cash flow is the amount of income left in your business after all your bills have been paid
- Cash flow is the lifeblood of any rental property investor
- Important: buy rental properties that offer cash flow today
- Tax savings
- US government like real estate investors. They provide housing for the increasing rental minded population and ensure stability in the economy
- Therefore, the government chooses to reward and encourage real estate investors through favorable tax treatment
- Loan paid down
- You can automate part of your wealth building by simply obtaining a loan on your rental property and using the income from your tenants to pay that loan down each and every month
- The portion of interest versus principal is defined by a term known as amortization
- House hacking: buying a multi family property with 2 to 4 units and living in one of them so that you can obtain a bank loan for as low as 3 1/2% down through the FHA loan program
- This is a great strategy for individuals who are just starting out and have limited cash and experience
- However to qualify, you have to live on the property for at least one year
- The second option and common standard is a 20% down loan
- The amount of reserves, or cash on hand for various expenses, is important to consider
- He recommends at least six months worth of expenses for each unit you have
- How much money should you have to get started?
- The simple answer is enough to cover your down payment and your reserves
- Downfalls of rental property investing:
- It takes time
- It can be all-consuming
- You have to deal with difficult people
- It requires paperwork and bookkeeping
- You can lose your investment
- Risk is a powerful and dangerous tool that cuts both ways
- If you wanna prevent yourself from failing, you have to treat rental property investing like a business and act like a CEO
- Monitor your businesses health
- Hire the right people to do the right jobs
- Continually find ways to improve your bottom line to create a long lasting business
- Build a solid educational foundation for yourself before you get into deep
- Don’t skimp on the math, always understand the numbers for any property you
- Work on your business, not in it. Treat it like a business
- Because rental property investing builds wealth in the long run, you probably won’t make a lot of money quickly and might not be able to quit your job immediately
- One essential truth: find what you love to do in life more than anything else and do that for a career
- By reinvesting your cash flow back into your business, you can leverage the power of compound interest to build a crazy amount of wealth in the long run
- If you’re considering the numbers and what you need to quit your job, one investor suggests your business should make at least three times your current job before you think about quitting
- 1x for tax, 1x for survival, 1x to reinvest and unexpected things
…
About the author
Brandon Turner lives with his wife Heather, two dogs, and two cats in Grays Harbor County, Washington. Brandon is an active real estate investor throughout his local area, specializing in rental property investing on properties ranging from single-family houses to medium-sized apartment complexes. You can find out more about Brandon at http://www.biggerpockets.com/users/brandonatbp or on his personal website, www.BrandonTurner.me.
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