# Resources for Real Estate investing



## balk (Dec 6, 2010)

Could anyone recommend any good resources on real estate investing. My wife and I have been looking at duplexes in the next 3 years and figured we might as well read up as much as possible. 

Thanks,

Balk


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## Berubeland (Sep 6, 2009)

Hi,

I would highly recommend not buying unless you make money. 

I would use the cap rate spreadsheet on Million Dollar Journey to evaluate property. 

As for reading resources I am currently reading Landlording it's one of the better resources I have every read about the business of property management even if it is from the US most of the stuff applies. 

http://www.amazon.ca/Landlording-Ha...6335/ref=sr_1_1?ie=UTF8&qid=1313975281&sr=8-1

Other than that I highly recommend http://www.johntreed.com/ for information on how to avoid the scam programs geared to rip off new investors

I have read one of John T Reed's books and I am going to buy more as well. Anything he writes is worth reading. He won't blow sunshine up your butt a quality missing in most of the real estate books I've read.


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## Four Pillars (Apr 5, 2009)

I recommend http://www.landlordrescue.ca/


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## balk (Dec 6, 2010)

Thanks for the help. I am trying to read up as much as possible for a possible purchase 2-3 years in the future when I get permanence at my job. 

I appreciate all the help and I have downloaded the spreadsheet attached to your article. 

I had a couple quick question cap rates. First, in your article, you base the cap rate on the purchase price. Isn't this similar to yield on cost? I read the wikipedia page and the calculate it on market value. Secondly, what is a good cap rate? How do current interest rates effect what makes a good investment? I imagine that cap rates will be much lower. 

Thanks again for the reply and insight. 

Cheers,

Balk


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## Berubeland (Sep 6, 2009)

The crucial part of the cap rate calculation is to add in all expenses and not count on capital appreciation to make your money. 

The higher the cap rate the better off you are. 

In relation to interest rates, the money you make is generally the difference between the mortgage rate and the cap rate. 

So if your cap rate is 7% and your mortgage is 4% you'll make 3%. You can also "hire" yourself to do work and that will pay you extra. 

Cap rates don't mean everything though, if your rests are not high enough to pay for improvements. 

For instance in Toronto there is a really healthy market for improved properties, people are willing to pay more for better. By painting and cleaning and adding a dishwasher and laundry you could charge $200 per month more and the payback on that renovation would be about 18 months to 2 years. The $200 would add about $40,000 to the income value of the property. 

Outside the GTA you're not going to get that kind of return on improvements. In fact you'll still have to paint, and that can of paint costs exactly the same as in Toronto and you may get no rent increase at all. Because cap rates are based on percentage of gross income but the cost of materials and renovations is relatively stable at one point it doesn't reflect the cost of keeping the unit up to date.


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## balk (Dec 6, 2010)

Thanks, 

I realize that the spread between cap rate and interest rates is the profit. I was wondering more how much lower the expected cap rates would be in a low interest environment? Is our target cap-rate based on a 1-2% premium on current interest/mortgage rates?

Thanks again for your help and replies. 

Cheers,

Balk


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## Dmoney (Apr 28, 2011)

Cap rate will move up and down with interest rates, but it's not as simple as an x% spread over the current 5-year mortgage. An office building in Toronto will likely have a sub 5% cap rate, a residential building in northern Ontario might get up into the double digits. Similar to stocks, the higher the risk, the higher the expected return. 

The flip side of this is that an office building in Toronto is considered a very low risk investment by lenders, and as a result, the mortgage will be on extremely favourable terms (lender knows that either the building will near full occupancy and cash flows will be substantial or that the resale value will exceed the loan value and the lender will get all the principal back). Less so for a building in tertiary markets. 

Keep in mind that if you have a building that has a 7% cap rate and is bought with cash, you make 7% on your equity. If it's financed with 50% cash 50% debt at say 4% interest, you've making 10% on your equity (7% on your cash and the 3% spread on the debt portion). This is identical to borrowing to invest though, so remember if you increase your upside, you also increase your downside.


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## joncnca (Jul 12, 2009)

Berubeland said:


> Hi,
> 
> I would highly recommend not buying unless you make money.
> 
> ...


John T Reed's got a bunch of different books. Which one did you read, and which are you planning to purchase? Any particular order?


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## mrcheap (Apr 4, 2009)

The author posted his recommended reading sequence at: http://www.johntreed.com/sequence.html

I've read a bunch of his books, and they've all been worth reading (they seemed expensive to me compared to book stores, but I think they're far better than most of the crap you'd get in Chapter's real estate section).


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## Berubeland (Sep 6, 2009)

Interestingly enough Mr Cheap is the one who turned me on to John T Reed. He bought me a book about how to write a self published book a project I am seriously considering, but have not implemented yet. The book was really good

I have not yet bought one of his real estate books mostly because I deal with real estate every single day, I'd rather read Sci-Fi in my spare time.  Later this year I'll be assisting one my clients in the search for a property and I thought his checklists for buying real estate would work great for me, so I'm going to buy that one. I may also buy his book how to manage property for maximum cash flow and resale value if just to see if there is anything in there I'm not already doing. 

He also recommends a book by Leigh Robinson on his site called Landlording which I did buy and it was worth every penny and more. I found a few interesting ideas that I've implemented in my processes. In spite of the fact that is is based on the United States it is very good and every single landlord should read it before starting out. http://www.landlording.com/

You have to understand that after being in this business for 15 years and dealing with a number of investors there are not too many new ideas to implement, but I'm always looking for ways to improve. I'm not in love with my processes in fact I love breaking them and improving them. 

I also have to state that I've also had the opportunity to read almost all the REIN books, and that they are thinly cloaked marketing material for the REIN network. At $3400 spread out over 17 months of easy breezy credit card payments I'm even more convinced now that they are not worth the money although they have never seen fit to show me their educational material so I can't say 100% for sure.


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## joncnca (Jul 12, 2009)

ya i saw that recommended reading sequence, i was just initially a little skeptical because there're 11 books there.

i have no problem reading, i'm not put off by a long reading list, it's just that in my experience sometimes when the same guy writes several books, they first one is good but the subsequent ones are just rehashes and money grabs.


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## mrcheap (Apr 4, 2009)

Read some of his real estate articles and you'll get a good feel for what you get in his books. He's a "straight shooter", so I think you'll find his book titles and descriptions are very accurate. Obviously some, like his tax book, aren't at all relevant for Canadians and should be skipped.


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## RichmondMan (Jan 31, 2011)

Really great recommendation! I have also this title. 



Berubeland said:


> Hi,
> 
> http://www.amazon.ca/Landlording-Ha...6335/ref=sr_1_1?ie=UTF8&qid=1313975281&sr=8-1


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## canabiz (Apr 4, 2009)

Bumping up an older thread, I will have a look at that Landlording title but for now I'd like to find a good book out there with strong Canadian perspective.

I was at Chapters last week and happened to see the following titles about Real Estate Investment (for Canadians) on the shelf

1. Real Estate Riches: A Money-Making game plan for the Canadian Investor by Tahani Aburaneh. Look like this guy is affiliated with Don R. Campbell and the REIN.

2. Secrets of the Canadian Real Estate Cycle: An Investor's guide by Don R. Campbell

3. Real Estate Investing for Dummies by Eric Tyson and Robert Griswold

4. The Canadian Landlord's Guide: Expert Advice for the Profitable Real Estate Investor by Douglas Gray and Peter Mitham

5. From Renos to Riches: The Canadian Real Estate Investor's guide to Practical and Profitable Renovations by Ian Szabo

Just wondering if you guys can recommend any of these books or other books with a Canadian perspective.

Thanks.


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## Just a Guy (Mar 27, 2012)

I've read Don Campbell's stuff, and I'd save your money by not buying them. I've got Gray's book as well which is a little better, but not great. 

The dummies book is on my shelf, but I never picked it up yet...

I've made my recommendation many times for a Canadian perspective book, you can find it on old postings of mine.


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## Berubeland (Sep 6, 2009)

I'd have to agree with Just a Guy about Don Campbell's & all of his associates I've read so far. 

I'd also like to make the point that if real estate investing is so profitable, why are any of these people wasting their time hawking books, course & memberships. If I could make all the money they describe in their books, I'd do that wouldn't you?


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## mrcheap (Apr 4, 2009)

I'd third Just a Guy and Berubeland's feelings about Don Campbell and REIN (I've read a couple of his books and was unimpressed). The problem with wanting a good real estate book with a Canadian perspective is that there aren't that many good real estate books PERIOD. It's a pretty broad field, and it's tough to get into specifics without knowing the market the reader is operating in (there certainly aren't any good Kitchener-Waterloo real estate books for example).

I would read good real estate books (like have been recommended), and adapt them to the Canadian market yourself. The math (cap rates and whatnot) will be the same. Approaches to renovations will be the same. General approaches to finding tenants will be the same (adjusted to legal requirement of the local market). Etc, etc, etc. If you want something specific to your market, you should probably read the relevant laws for your area (the Residential Tenancy Act here in Ontario: http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_06r17_e.htm).


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## w0nger (Mar 15, 2010)

Wow, Reed's books are expensive. Adding in the shipping it's over $50... so the general consensus is that it's worthwhile? I will be becoming a landlord for the first time in my life come June 2013 for my condo apartment. I take it that How to Manage Residential Property for Maximum Cash Flow and Resale Value, 6th Edition, is THE book to get?


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## Berubeland (Sep 6, 2009)

For you I'd reccommend the landlording book. The managing residential property is geared at apartment buildings. http://www.landlording.com/landlording_007.htm
also available on Amazon but it's both cheaper and the author makes more money when you buy it from him. 

Also if you want free forms for tenants in Ontario just go to my site and download them.


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## Four Pillars (Apr 5, 2009)

w0nger said:


> Wow, Reed's books are expensive. Adding in the shipping it's over $50


And how much did the condo cost?


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## Just a Guy (Mar 27, 2012)

Reed always struck me as arrogant. He writes books on everything from coaching children's football, real estate, how to live a full life,to how to write and sell books. He's got a negative opinion of nearly everyone else and implies everyone else is stupid. At least that's what I get from reading his website. I can see why he appeals to people...

You can buy used copies of his books from places like abesbooks.com. 

As for the land lording book, it's a reference book, not a sit down and read kind of book...at least I couldn't read it. For long stretches.


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## w0nger (Mar 15, 2010)

Berubeland said:


> For you I'd reccommend the landlording book. The managing residential property is geared at apartment buildings. http://www.landlording.com/landlording_007.htm
> also available on Amazon but it's both cheaper and the author makes more money when you buy it from him.
> 
> Also if you want free forms for tenants in Ontario just go to my site and download them.


thanks, i just ordered the book off amazon. I'm located in Alberta, hopefully i'll find some good ressournces that are local to Calgary...


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