4 Must Read Books for beginner investors (In the right order)

[Rishit Shah]

When I took the decision to begin my journey as a real estate investor, it felt like I had driven right into the choice overload junction. Frankly, it was overwhelming. The plethora of information was just too much for me. Over time, as I spent more time reading books and listening to podcasts, things started making more sense. Slowly, the information fell into place, helping me shape my understanding, attitude and strategy for investing in real estate. In retrospect, I feel that although the books I am about to talk about were extremely helpful in their own respects, they initially left me with more questions than answers because I picked them in the wrong order. It was later on when I finished reading all of them and had the "Aha" moment, where everything sort of fell into place and made me feel confident about starting my journey.

I won't lie. Even before beginning, I was biased towards rental properties since I have always believed in building long term wealth rather than focusing on short term gains. As a result, the books that I will talk about will be most useful to those looking to invest in residential rental properties. That being said, before you leave this post thinking "well, I am not sure if I want to do rentals yet", let me tell you this; these books HAVE A LOT OF INFORMATION THAT WILL BE HELPFUL TO ANYONE WHO IS INTERESTED IN REAL ESTATE. So while you may not read complete content of all the books, certain sections will certainly be helpful in shaping the attitude needed to feel more comfortable with real estate. Without further ado, here goes:

1) The Book On Rental Property Investing by Brandon Turner: 

Unfortunately, I picked this book the last. However, reading this first is important for several reasons. To begin with, this book addresses some of the most important questions that will make you feel comfortable with real estate. It starts out by not only talking about the secrets for success, but also the most common reasons for failure as an investor. I often found myself so pre-occupied listening to success stories that I barely consider the numerous, obscure cases that never made it. This book was an eye opener since helped me understand the common causes of failures as an investor and how to avoid them. More importantly, it has reinforced the idea of analyzing both sides of the coin with equal importance. Secondly, this book also provided high level details about different investing strategies along with techniques to find, analyze and negotiate on deals, building teams and much more. Reading this book first provides a peek into the vast variety skills and systems that will come in handy for choosing and executing an investment strategy. 

2) The Book On Estimating Rehab Costs by J Scott.

This book serves as a detailed version of the technique for analyzing rehab costs for a rental property. You could skip this book if you are investing in turnkey rental properties. However, if you intend to use the BRRR strategy or even choose to go the route of flipping, this book will serve as guide to understanding the basic components that are involved in rehabbing a home along with the complexity and costs of dealing with them. I realized I had ignored some of them even while purchasing my primary residence!! While this won't prepare you to become a licensed inspector, it will certainly bring many details to your notice about a home that could potentially require work or could cost you money down the road. If you are like me who has no understanding of what goes into rehabbing a property, I would suggest opening up google and looking up each component they talk about in each chapter. Look up how that component looks when it is in good shape and how it looks when it has issues as described by the book. While I found impossible to remember each and every detail of what to look for in each component by reading it just once, it has certainly helped me develop an eye for figuring out what may need work simply from looking at the pictures of the property.

3) The Book on Investing with Low or No Money Down by Brandon Turner

Once you have explored the strategies and decided what you which one suits you best, this is the next book that will serve as the next step required to execute the strategy - figuring out how to finance your property. What I love about this book is that it provides good amount of details regarding the different kinds of financing available to us as an investor. Whether you have enough money to buy your first property with all cash or are starting out with $500 in your bank account, you will learn something from this book. For those with sufficient financing available for their first deal, this book will provide you with tools that you can use to stretch your money and get the most properties using that. For those starting out with no money, it will provide you with the right tools to secure that first deal without using any of your own money. All that being said, the key highlight of this book for me was the equal emphasis on the pitfalls of each financing method mentioned. There is no denying the fact that everything has its down sides and this book assigns equal importance to them. 

4) Long distance Real Estate investing by David Greene

"But I don't want to risk long distance investing as a beginner. I would rather start with investing in my backyard. I don't need to read this one right? ". I would disagree. While this book primarily focuses on long distance real estate investing, it talks in depth about one key aspect that all of us as investors will encounter at some point in our journey - Building the right systems and gathering the right team to scale our business. As you will learn in great depth in the book, long distance investing forces us to take additional safety measures since we will never see the home in person. It also forces us to think outside the box and delegate as many tasks as possible since we cannot be present to solve them in person. If applied correctly, these skills can prove to be extremely valuable regardless of where we invest since it teaches us how to free up our time so we can focus on finding the deals rather than fixing operational problems. To quote the author, it teaches us "to work ON our business not IN it".

Had I read these books in the order I mentioned, I would have spent much less time scouring the internet and attending "educational seminars" ( ever encountered the ones that only provide limited information which provides no additional value and attempt to sell $20000 programs? yup, those). I am not saying reading them will make you the Mozart of real estate investing, but picking them in this order will certainly help the pieces fit more seamlessly in your head. Think of it as laying the foundation in the right way (pun intended).