John T. Reed’s real estate investment blog

1. Are you really sure you want to do this? A real-estate-investment program will consume large amounts of your time, subject you to considerable financial risk, force you to engage in the generally unpleasant task of dealing with tenants and maybe employees and subcontractors (some approaches to real estate investing do not involve tenants, employees, or subcontractors), and saddle you with significant responsibilities. There are other ways to make a buck, you know. Is being a real estate investor just an abstract concept to you? Or do you really know what it's like to be a landlord (if you plan...

Suzanne P. Thomas is a rental-house investor and home Realtor®. She bought her first rental house in ’92 and wrote this book around ’97 after buying several other houses. Little homework As far as I can tell from reading the book, she had little or no formal education on real estate investing—like Realtor® CCIM or Appraisal Institute courses. Her limited experience and lack of homework shows. She appears to have had the good fortune of investing at a good place and time. But she seems to have made a mistake well-described by the old Wall Street saying, “In a bull...

The real estate B.S. artist detection check list I am sometimes asked why I created and maintain my real-estate-guru-rating page. Here’s why: For many years, people have asked my opinion of various other real-estate-investment gurus. I tried to answer them once-and-for-all by writing an article called "The real estate B.S. artist detection check list" in the 1/90 issue of my newsletter, Real Estate Investor's Monthly. That article was supposed to teach people how to recognize, without any further help from me, which gurus were good and which were bad. However, I found readers still wanted my specific recommendations yay or...

There are three broad categories of investment strategy that I advocate: bargain purchase increase value double-digit cap rate. Bargain purchase is the purchase of real estate for at least 20% below current market value. In the increase-value strategy, you buy a property for its current market value, but you select only properties with some unrealized potential. Then, immediately after purchase, you make whatever cost-effective changes are necessary to increase the value of the property. In general, you must increase the value by at least 20% within six months in order for the strategy to be worthwhile. Double-digit cap rate means...

23. Repeated efforts to sell you more and more expensive products and services. Many gurus, including some whose products seem relatively inexpensive, are intending to suck you in, then pressure you to buy ever more expensive products and services. I do not object to a salesperson asking you the publishing equivalent of, “Do you want fries with that?” But a calculated program of trying to move you to significantly more expensive products and services smacks of bait and switch. Legit businesses offer you their entire product line up front and do not use high-pressure tactics. The gurus who follow this...