Value Investing in Real Estate

Rating:
Summary: Outstanding comparison of value investing
Review: As an investor with 11 years left to retirement(I hope), I greatly appreciated the detailed and thoughtful way this author compared and and contrasted various investments. I like to think of myself as a smart investor who is extremely concerned about asset allocation and this book truly fills that need. Also, the book doesn't "trash" stocks. It shows that based on yield and risk, stocks will subperform well-selected income properties. It does not allege that stocks always rank poorly, nor does it claim real estate is always a great investment. Instead, it gave me the knowledge to make more profitable investments--regardless of whether I buy stocks or property. The book is extraordinarily well researched and referenced (hundreds of notes at the end of the book) for serious investors. Personally, I enjoyed reading these notes as much as the book, itself. Lots of insight into how we got to where we are and where we're going. If you decide to only browse through the real estate-stock analysis, the latter 6 or 7 chapters that focus primarily on property will give you more than your money's worth.

Rating:
Summary: Outstanding comparison of value investing
Review: As an investor with 11 years left to retirement(I hope), I greatly appreciated the detailed and thoughtful way this author compared and and contrasted various investments. I like to think of myself as a smart investor who is extremely concerned about asset allocation and this book truly fills that need. Also, the book doesn't "trash" stocks. It shows that based on yield and risk, stocks will subperform well-selected income properties. It does not allege that stocks always rank poorly, nor does it claim real estate is always a great investment. Instead, it gave me the knowledge to make more profitable investments--regardless of whether I buy stocks or property. The book is extraordinarily well researched and referenced (hundreds of notes at the end of the book) for serious investors. Personally, I enjoyed reading these notes as much as the book, itself. Lots of insight into how we got to where we are and where we're going. If you decide to only browse through the real estate-stock analysis, the latter 6 or 7 chapters that focus primarily on property will give you more than your money's worth.

Rating:
Summary: Buffett is spelt with two ts
Review: Dr Eldred obviously knows real estate. But his references to Warren "Buffet" annoyed me. It's one of those attention-to-detail things, I guess. He makes the same mistake in his "Make Money with Fixer Uppers and Renovations". Apart from that, both books are worth reading

Rating:
Summary: Get A Clue
Review: First of all, I have been in the investment business for years. I recommend stocks, mutual funds, bonds, treasuries, commodities, REIT's, etc. Many of the reviewers here don't have a clue what they are talking about. The stock market is not the only way to invest. In fact, given current market valuations and investor sentiment (historically high sentiment now-2003) future stock market returns will come nowhere close to what we've seen over the past 2 decades. Personally, I think that at least to 2010 we will be lucky to get market returns of 5% annually - very lucky!! The reason making money in real estate is so attractive now is that many rentals offer positive cash flow immediately (unless you live in most areas of CA, Boston, D.C, etc). Also, the KEY to making money in real estate is LEVERAGE. Example: You buy a $100k property that appreciates at 3% year for the next 5 years. You put down 20% ($20k). Your 30 yr fixed mortgage payments are $475 month ($80k at 6%). You rent the unit for $800 month ($9600). Expenses are $100 month. Taxes are $75 month. So, in Year 5 your property is now worth $116k. Your mortgage balance is $75k. You have equity of ($116-$75 = $41k). All this on a $20k cash investment. In the meantime, you've NETTED $150 month X 60 months = $9000 total. You've really turned $20,000 into $50,000 in 5 years (20.1% CAGR). This doesn't include annual rent increases OR tax deductions (both of which would equal thousands of dollars). The key is you get leveraged appreciation WITHOUT MARGIN CALLS. Unless you are Warren Buffett, forget about making money in the stock market now or EVER. Real estate is not for everyone though. If you are serious about real estate this book is a great read.

Rating:
Summary: Perfect Analysis
Review: If you read this book, you'll understand the what and why of the financial markets today. I read it in March and was able to dump my stocks with the Dow still over 10000. That was painful. I was following the "to bail is to fail" advice of my financial planner. But after serious argument, my planner could not begin to intelligently fault this book's analysis and recommendations. As to the future, I'm convinced. I feel far more confident with the properties I bought than I ever did with stocks. My cash-on-cash return (not counting appreciation)is 12 percent. Follow the advice laid out here and you're almost guaranteed wealth without risk. But do plan to invest some time as well as money. Only fools still think that plopping monthly deposits with Vanguard is all that's required to fatten one's net worth.

Rating:
Summary: Get A Clue
Review: This book can be quite frustrating to read, for the first 100 pages or so. Basically, it paints a very negative portrait of stocks, and how it will be doomsday galore in about 30 years for stock investors, since the rate of elderly people seeking to cash their stocks out will increase, causing the stock market to blow to you know what. Then the author says that because of this, you need to start investing in real estate, where the risks are much lower, and the returns are much higher. But this is so silly, because if the stock market crashes, and millions upon millions of people holding stocks are finding themselves in the poor house, then guess where that will leave real estate owners? With lot's of paper money that won't be worth a darn thing anyways! And this is assuming that real estate owners won't be effected by a severe economic depression, but this is contradictory to what the author admits in his logic. He stated that deflation caused by economic depression will be hurtful for real estate owners, and traditionally, that many go belly-up when this happens, as it did in 1929. So how the heck can it be advantageous to hold real estate instead of stocks when the market goes kaplunk in 30 or so years (which he so ingeniously *sarcasm, cough, sarcasm*) predicts?

Truly, the author should have just sticked to talking about how real estate can be a wise investment, which it most certainly can be, and leave the rest of his opinions for smarter people to handle. There was absolutely no need to go off on a tangent discrediting stocks like he did. He made some good points, but then he also unknowingly contradicted himself at times, like I pointed out above. Furthermore, he used the DJIA to promote how the market has only appreciated at a dismal rate, but he should truly learn how the DJIA is computed before making such bold assumptions. Any smart investor knows that the DJIA is not a very good indicator of how well the economy is doing, and it was a be-all/end-all in his efforts to convince you on why stocks are so bad to hold.

Anyways, he does give some good advice on real estate. He just should have stuck with it, and cut out about half of the book in which he blew off on a tangent.

Rating:
Summary: Somewhat useful
Review: This book can be quite frustrating to read, for the first 100 pages or so. Basically, it paints a very negative portrait of stocks, and how it will be doomsday galore in about 30 years for stock investors, since the rate of elderly people seeking to cash their stocks out will increase, causing the stock market to blow to you know what. Then the author says that because of this, you need to start investing in real estate, where the risks are much lower, and the returns are much higher. But this is so silly, because if the stock market crashes, and millions upon millions of people holding stocks are finding themselves in the poor house, then guess where that will leave real estate owners? With lot's of paper money that won't be worth a darn thing anyways! And this is assuming that real estate owners won't be effected by a severe economic depression, but this is contradictory to what the author admits in his logic. He stated that deflation caused by economic depression will be hurtful for real estate owners, and traditionally, that many go belly-up when this happens, as it did in 1929. So how the heck can it be advantageous to hold real estate instead of stocks when the market goes kaplunk in 30 or so years (which he so ingeniously *sarcasm, cough, sarcasm*) predicts?

Truly, the author should have just sticked to talking about how real estate can be a wise investment, which it most certainly can be, and leave the rest of his opinions for smarter people to handle. There was absolutely no need to go off on a tangent discrediting stocks like he did. He made some good points, but then he also unknowingly contradicted himself at times, like I pointed out above. Furthermore, he used the DJIA to promote how the market has only appreciated at a dismal rate, but he should truly learn how the DJIA is computed before making such bold assumptions. Any smart investor knows that the DJIA is not a very good indicator of how well the economy is doing, and it's a be-all/end-all in his reasoning.

Anyways, he does give some good advice on real estate. He just should have stuck with it, and cut out about half of the book in which he blew off on a tangent.

Rating:
Summary: Stock enthusiast ?Not any more!
Review: This book opened my mind to the impossibility of everybody getting wealthy in stocks. I confess, though, I was one of those stock enthusiasts. I believed Jeremy Siegel (Stocks for the Long Run). I'm now convinced, there's no way the 401k and other touted stock plans can give 70 million boomers enough income to retire. Eldred proves it through both common sense and clearly presented number crunching. But for me, his biggest point was this: As millions of boomers begin to realize that they've been sold a defective product(stocks for retirement), they're going to turn to income properties. In fact,it's already beginning just as he predicted. So, he warns not to wait. Because just as with stocks, the price-yield for real estate is going to get worse as too much money continues to chase after too few good investments. That's the bad news for those who ignore the real world. On the bright side, his "metrics" for valuing both the present and future values(areas and properties that will show great returns) surpasses by far any other book I have read. Low risks, high rewards--they're still out there, as long as you are willing to use your enterprise and intelligence.

Rating:
Summary: Lower risk, higher returns
Review: Were you disappointed with Rich Dad's Real Estate Riches? I was. But, here's what I was really looking for. This book fills in the details where Real Estate Riches glosses over with boring generalities. While you don't need to be a real number cruncher to understand the book's advice(the discussions read easily ), Eldred does go through the calculations to show that when you take account of all types of risks and returns, you can do much better with real estate--if you follow the principles of value investing. I also learned that to best choose your properties, you must forget the old cliche, " Buy below market", Instead, you need to focus on properties (locations) that stand the best chance of appreciating.Makes sense to me!