Bread & Butter Properties

Bread & Butter Properties
Generate passive rental income

Monday, July 26, 2010

You Need an Education in Real Estate

When I first started investing in rental properties a few years, I was fortunate that I had a mentor whom I could call and get some advice from. But there was a limit to how far I could go with this: it's not possible to be calling him on every single thing.

The first thing he suggested I do before I even start buying property was to buy a book! And that book was Dolf De Roos' "Real Estate Riches". By reading and applying the principles from that book alone has helped me make a lot of money from investing in properties. So I say: you need an education in real estate before you start investing.

Why do you need an education?
Like in all professions in life, whether you are an engineer or an accountant, you need to learn how to do it, before you are qualified to do it. A good education distinguished the goods ones, from the rest of the pack. Even the char kueh teow man needs to learn how to fry the kueh teow from someone; most of the skill was probably handed down through the generations. The point is: you need to learn. There are a few ways to learn; one can go through "trial and error" (learning from your own mistakes, which can be costly) or learn from someone else's experience and mistakes. I think it is wiser to do the latter.

How can you get one?
Well, there are a few sources to learn from: books, seminars, videos, and mentors.

If you have someone who has done it successfully show you how to do this i.e. how to invest in rental properties, then you are blessed.  A mentor is probably the best way to get started as they have the experience and can point you in the right direction. That would save you a lot of time and money (and headaches!). But, it's not easy to find someone who would want to share with you his "secrets" and spend the time mentoring you, especially if he/she is busy and has no direct interest in your success. Chances are if he/she is successful already, you may not even afford to pay for their time! Imagine trying to hire Donald Trump?

So, the next best thing to do is to invest in books, seminars and videos, by experts in the field. Like any form of commercial endeavors you will need to invest first, before you reap the benefits. It is the principle of "sowing & reaping". I would start by getting some good books on real estate investing and devouring them. Kinokuniya@Suria KLCC probably has the best selection in town. Books are like food for the brain; they feed your mind. As we read, we have time to think through some of the principles from people who have done what we want to do, and then apply them.
There are so many books on real estate that you can pick up:  
  • "How to" books from experts like De Roos, Schaub and DeCima and Eldred,
  • "Big Vision" books from Donald Trump, like "the Best Real Estate Advice I ever Received" and "Powerhouse Principles" by Jorge Perez.
  • "Real Estate for Dummies",
  • Negotiations – by Peter Ross who is Donald Trump's senior attorney involved in negotiating all this high profile real estate deals,
  • Countless others on more specific topics like flipping properties, managing tenants, how to "buy, renovate & flip", taxation for properties, creating wealth through property, and others.
So, don't hold back, and get as many books you can; remember, you are investing in yourself, by learning from the best minds in the business. It will pay you back many times over: it certainly has in my case. I am still expanding my collection of real estate books, moving into new areas of interest like commercial real estate investing, which has different principles (compared to residential investing).

If you have a chance to go seminars organized by experts, you should also invest in this. The right ones will certainly help to speed up your learning curve. One of the human insights is that we can recall more of what is taught, when a blend of showing and telling is used.

Good luck & happy learning.

 "When I get a little money I buy books; if any is left, I buy food and clothes" – Desiderius Erasmus, Humanist & Scholar

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