There are a lot of books on real estate investment out there. Some are good and some are bad, but one problem many of them share is that they most are very broad. In other words, they all tell you how to become a real estate investor in general. (As my upcoming book will as well, but it will be done better than all the rest so it should definitely buy it!)
The problem is twofold. First, by covering so much information (marketing, networking, acquisition, rehab, management, maintenance, etc.) each topic if unavoidably given only a relatively small amount of space. And second, many of these books start to become quite repetitive as you read more and more of them. Even very good books, like Brandon Turner's The Book on Rental Property Investing (again unavoidably) covers a lot of the same ground that The Millionaire Real Estate Investor by Gary Keller did.
Fortunately, BiggerPockets has lead the trend toward more niched themes for real estate investing books. This allows for deep dives into important topics that would otherwise get a relatively cursory and often redundant overview in your standard real estate investment book. And with that, I can finally turn to the subject of this review: Raising Private Capital by my friend Matt Faircloth.
The book is definitely focused primarily towards raising private capital for real estate investment, but should be helpful for raising private capital for other ventures as well. This is because Matt focuses much of his attention on how to find and persuade potential private lenders to become actual private lenders. And for anyone involved in real estate investment (especially those using the BRRRR strategy, like ourselves), raising private capital is absolutely essential.
Matt covers both those looking to raise private debt, usually to buy houses, and those looking to raise private equity to buy apartments and commercial buildings. Indeed, one of his key recommendations for finding potential lenders is similar to the best piece of advise my dad gave me when looking for private lenders; sit down with a pen and pad and set a goal for the number of names you can write down. As Matt puts it,
...I want you to take out a piece of paper and create your master core group list.
That should get the noggin joggin'.
And then, of course, you write down anyone you can think of in those groups who might be a possible "cash provider" and start reaching out to them.
Matt also goes through the nitty-gritty of the how-to part of financing (trust deeds, title companies, syndications, the SEC, etc., etc.,) so the book makes for a good reference manual as you work your way through the process, especially in the early going. (Although, as he and I both note, you should always talk to an attorney about such things as well.)
And I should that this book is even a good read for seasoned investors who have already had success raising private funds. There were several nuggets I found which I hadn't thought of before, including finding people with equity in their home who can use a HELOC (Home Equity Line of Credit) to lend to you. Then they can pocket the spread between their HELOC interest rate (usually 4 or 5 percent) and the private loan rate (usually 8 to 10 percent). The big advantage a HELOC gives a cash provider over a traditional mortgage is they can lend to you exactly how much you need when you need it and only pay at those times,
If they [cash providers] don't borrow against the line, they have no monthly payments. When they do borrow, the payments are associated only with what they have out on the line of credit... Once they are in a deal, the carrying costs of that debt are low, and once the deal is complete, they can pay back their HELOC and wait for the next deal to come around. (pg. 76)
This is a highly flexible and relatively low-risk method for potential lenders (or "cash providers") to lend you funds for your next deal.
Now, perhaps I should have already thought of this, but it's sort of aside the point. The fact there were multiple nuggets in the book that I hadn't thought of attests to its thoroughness on the subject. I suspect most other seasoned investors will find several good tips as well.
And for new investors looking to raise private capital, there's far more than just a few nuggets!
You can check out Raising Private Capital here as well as Matt's BiggerPockets' blog here and his and his wife Liz's Youtube channel here.
It what is easily the most shocking and bewildering turn of events in the history of humanity, it turns out Jeffrey Epstein may not have voluntarily given up on his plans to "seed the human race with his DNA" and actually just got whacked,
The body of disgraced money man and sex offender Jeffrey Epstein, who was found dead in his Manhattan federal prison cell in August, bore telltale signs of homicide despite an official ruling that he killed himself, a pioneering forensic pathologist revealed to “Fox & Friends” in an exclusive interview Wednesday.
Well, I guess despite my rather sarcastic title, I am somewhat surprised this is getting play in the mainstream press. Perhaps it was just too obvious.
Jeffrey Epstein's """"""""""suicide"""""""""" lead to a lot of conspiracy spiraling on my part. At this point, however, I think believing Epstein actually did off himself would require a farcical conspiracy theory the likes of which would make Alex Jones (or Rachel Maddow for that matter) blush.
My latest article for BiggerPockets goes over eight signs you have a bad real estate agent. Or more accurately, five signs you have a bad real estate agent and three signs you have a real estate agent that doesn't have an "investor-mindset." Now if you're looking to buy a home to live in, that's fine. But if you're looking to invest, that just won't do.
The five signs you have a bad agent are:
And then the three signs your agent isn't the right fit for an investor are:
The article goes into much more detail. So if you're looking to invest in real estate with a buyers agent, check it out!
Check out the second episode of The Good Stewards podcast, this one going over a "BRRRR rehab." These are rehabs for buy-and-hold, rental properties and there is a large tendency for investors to under-budget and over-rehab these types of houses. Remember, you're not rehabbing a house to live in. You don't need granite counter tops or Brazilian hardwoods (unless it's a luxury rental, of course).
If rehabbing rentals is on your horizon, check out this 30-minute discussion between Ryan, my father Bill, Amanda and myself on the topic:
Episode 1: The BRRRR Strategy Overview
My most recent article for BiggerPockets is up. This one goes over when it does and when it doesn't make sense to purchase a property that is in a Homeowners Association (HOA). My thesis can be summed up by my line early on "My own position differs from Mr. Frugalwoods. I believe that HOAs are a detriment to purchasing a property but by no means a non-starter."
I go over all sorts of disadvantages, advantages and things to look for with HOA's. That being said, I focused heavily on HOA's for condos and not as much for houses. Usually I don't see HOA's for houses other than in nicer communities we don't buy rentals in. That being said, some investors do and it can be helpful, as my friend Russell Brazil reminded me:
No yellow polka dots = No Deal!
I have three books out right now (and will be coming out with a fourth on real estate investment at the end of this year to promote our real estate podcast The Good Stewards, which just launched). The first one is the only one I've published with a publisher, in this case Thought Catalog. And that is Awesomeness: An Amateur Porpourri of a How-to Guide in which I give every piece of advise I can for living well from my own experiences and the many books I've read on these topics. (And yes, there have been a lot, so it's definitely worth reading.)
Awesomeness: An Amateur Porpourri of a How-to Guide
My second book is a compilation of articles I wrote for SwiftEconomics with a few original pieces on how easily economic statistics (and others) can be manipulated and/or misused. Examples include income stagnation, the gender wage gap and the myth that war is good for an economy. The title comes from Benjamin Disraeli's famous dictum about the three kinds of lies.
Economic Lies, Damned Lies and Statistics
You can read most of those articles on this website here (although they are much better in book form and easily worth the 99 cents the Kindle version costs).
I also co-wrote a book with Ryan Swift, which was a compilation of the best articles we had written for SwiftEconomics.com.
Confessions of Amateur Intellectuals
You can still see the archives of SwiftEconomics here.
Make sure to check them out. It would be greatly appreciated and I think you'll enjoy them.
I know I have a bad (good?) habit of posting on Charisma on Command video after another, but hey, it's good content. This time, they take on happiness and echo some of the points I've made before, for example here and here. Namely, there is no "there" to get to. As I put it,
I've come to accept that we need to look at this from a more macro perspective. There will always be ebbs and flows in life. We should never plan on "getting there" because there is no "there" to get. We can always do better than we are now. Even Warren Buffet could make more money. Hell, Jeff Bezos has more than him.
Charlie from Charisma on Command lists a hierarchy of things that lead to happiness. At the bottom is "stuff" or even accomplishments I would add. These things are fleeting and not that important. His list is as follows, from least important to most:
The more we can focus on the higher level items (connect and appreciation) the happier we'll be. Ont he other hand, if we focus too much on stuff and experience, we'll limit that potential.
Hey everyone, make sure to check out the launch of The Good Stewards Podcast, which is "dedicated to seasoned real estate investors who want to maximize the cashflow potential in their business." The podcast features me, my father Bill (who started Stewardship Properties back in 1989), our Operations Officer Amanda Perkins and colleague Ryan Dossey.
The early launch has five episodes out along with the following trailer:
And check out the episode where we go over the BRRRR method of real estate investing here:
Legacy Development, a Kansas City-based property development and commercial management company which I profiled here and here, is really stepping up there game. They've now moved into the 10 figure ballpark. From The Kansas City Business Journal,
Legacy Development will lead an project that could attract nearly $1 billion in private investment in Hutto, Texas — located in a growing suburb of Austin... The highlight of the new development is a national headquarters of Perfect Game, a baseball scouting organization. Along with baseball fields, the project will include an indoor sports and events center, convention hotel, restaurants and retail space.
Sounds like quite the project. Congrats and good luck to everyone at Legacy!
Stewardship Properties will get there soon enough... we're on the way!
Another good video by Charisma on Command, this time on how to increase your willpower. Unsurprisingly, he bases much of his argument on Roy Baumeister's great book Willpower (although admittedly, some of the ideas have come under scrutiny amidst the replication crisis in psychology).
Still very sound advise:
"Every day is a new life to the wise man."
The Righteous Mind
Star Slate Codex
Consulting by RPM