Making the purchase pencil out
Book Review: 'What Every Real Estate Investor Needs to Know ...'
By Tara-Nicholle Nelson, Tuesday, May 19, 2009.
Cover image courtesy McGraw-Hill.Book review
Title: "What Every Real Estate Investor Needs to Know About Cash Flow ... And 36 Other Key Financial Measures"
Author: Frank Gallinelli
Publisher: McGraw-Hill (revised and expanded, 2009); 312 pages; $22.95 list ($15.61 on Amazon.com)
When I was in college, my statistics professor opened up the first day of the course with: "This is an equal sign. Whatever is on one side of the sign is the same as whatever is on the other side of the sign." Kinda basic, but she was a campus favorite in an otherwise dreaded subject, because her start-at-the-very-beginning approach truly left no student behind.
Similarly, Frank Gallinelli, in the 2009 edition of his almost-classic book, "What Every Real Estate Investor Needs to Know About Cash Flow … And 36 Other Key Financial Measures," starts out with the very most basic premise underlying real estate investing -- the concept of cash flow -- and builds slowly and logically from there. A serious investor at any level will not be left behind.
The introduction and first four chapters bear reading straight through, as they touch on all the critical intersections between the essentials of a worthwhile investment and the calculations necessary to determining whether those essentials exist in any given prospective investment.
From there on, the book is essentially a toolkit of various financial measures, complete with sample calculations, with each brief chapter devoted to a particular measure.
The book is highly usable, containing a good number of decision-making insights and rules of thumb, many of which seem to be derived from Gallinelli's own experiences as an investor -- some specific examples of which he offers as evidence of the need to run these numbers. Additionally, readers are given a Web address at which they can obtain free Excel spreadsheets and/or access to online calculators into which they can plug their own projects' numbers to run the analyses detailed in the book. ...CONTINUED
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Michael Eckerman on July 22, 2010 - 9:00am.
The savvy real estate investors have sustainable back-up strategies when they invest. For instance, we would all like to buy and sell properties and put large amounts of cash in our pocket. If however we find this strategy does not work on a certain piece of real estate, it is important to realize that if the property has equity, in order to maximize that equity it may be necessary to take a different approach as opposed to flipping the property for profits that are not so readily available in today’s market. If an investor purchases a property and they rent it out, they may find a sizable number of tenants who are willing to pay large sums in rent for the opportunity to purchase this property down the road as they clean up their credit (credit-clean-up now being the norm, rather than the exception). By meeting the needs of the masses, you can create a niche, have sustainable investment strategies and still allow yourself to make monies on flips, but also having additional options and tools in your arsenal. Be smart and think of all the exit strategies BEFORE you purchase the property. Michael Eckerman, Wealth Recovery Specialist, www.wealthachievementstrategist.com