Book Review: Building Wealth One House at a Time

This was my book recommendation from Drena-thanks Drena for the recommendation. I have to be honest and say that at first I wasn't too excited about the book but the point was to have people suggest something that I wouldn't pick on my own, so it fit that criteria. Also, just to explain, the reason that I wasn't too excited was that I felt like it was going to be a sort of "look how I built wealth when I already had wealth" or "get rich quick" type books. I guess I didn't really think that because Drena doesn't seem like the type who would read that type of book either and it turns out I was right. This book was really good!

What I liked:
I liked the fact that he promoted the fact that building wealth takes time. It is not a get rich quick type scheme like many people look for. He suggests buying one house a year for 10 years and selling them once they have doubled in value. I know a lot of you are saying "that doesn't seem like it would happen in this market" but actually, in the history of the US there hasn't been a period of 10 years where houses didn't appreciate at all so even if it takes a little longer, it will happen and if you get lucky it will happen earlier.

I liked that he taught you what kind of houses you should buy. He talked a lot about how you shouldn't buy a super cheap house because you will not attract the tenants that will take care of it. On the flip side, you shouldn't buy a super nice house because the people that can afford to live there are only going to live there long enough to save the money to buy their own house (which at their income will not take very long).

I liked that he talked about what kind of tenants to get...the kind that take pride in where they live but for some reason they cannot afford to buy. Also, the kind that will stay for a while and take care of your property while doing it.

I also liked that he seemed to be a fair person and devoted several paragraphs to how you shouldn't screw someone over to get a good deal. He teaches that in every deal, both people should win. Maybe that means them getting out of a house they can't afford, but it doesn't have to mean that you undercut them to the point that they are worse off than if they still had the house.

I liked the fact that he even gave ideas on how he bought houses and found tenants who couldn't qualify for loans but counseled them on how to improve their credit until they could qualify and then selling them the house they were already living in (this can be complicated and not something I would do off the bat but it would align with other interests that I have in helping people who struggle with finances so maybe a long term goal for me).

I like that he showed real numbers and examples that were not ridiculous (meaning he used prices of houses you could actually buy and not be a slum lord).

I like that he is involved with Habitat for Humanity and realizes that just getting rich is not the only important thing in life.

Overall I just felt like he was a very likeable guy, like if I met him I would probably want to be friends with him.

Couple things that I didn't like:
It wasn't so much that I didn't like them, but I guess I just question a little bit of their reality. He talks at times about very creative financing. One being to make a deal with someone to lend you the money for your downpayment and then agreed to give them half the equity in the house when it sells. He gives the example of buying a house for $100K with $10K down and selling for a $94K profit in 10 years. Now, I don't really know anyone who could give me $10K now even if I promised them that they would get $47K in 10 years. If you happen to be one of those people then definitely give me a call. His theory is that there are people who want to invest in real estate but they don't wan the hassle of looking for a place, buying it, managing it, finding tenants and all that so they basically pay you $10K to do it for them. Now, this is actually a great deal for them and I am not sure there are many other places you could put $10K and get a 400% return in 10 years but I just don't see someone waiting that long...as I said earlier, people want to get rich quick. I do think that you could find a few people who would give you $1,000 in the hopes of getting $4K in 10 years....seems less of a risk upfront with them...I guess they would just have to be the type of person who really trusted you or the type who can say "that $1K is gone" as soon as they give it to you and then be pleasantly surprised when they got that $4K.

Actually, I guess that was the only thing that I didn't like. I have been interested in real estate investing for a while. I like my job and everything but the older I get the more I realize that I don't want to work for a company for my whole life. I want to do my own thing and real estate is a great way to save and do that. I have always been a saver by nature because I grew up without a lot of money and learned at an early age. Turns out I am really good at it and material things just are not as important to me.....I like to have nice things but I dont' need to have ridiculous things, if that makes sense. I am lucky in that I am good friends with Drena and she knows a lot about this so I guess I don't have to do as much research as I would have to if I didn't have her (thanks Drena) but it is a two way street cause I am her most repeat client other than herself, having bought three properties from her, including the first one she ever sold. I have talked to her on and off about investing but I guess I was always a little scared. Once prices started dropping lately I got less scared, and then I read this book and I got even less scared and now I am going to look at houses on Sunday. This is my little experiment. Could be a costly one but I am hoping that it will prove to be a good thing. Not sure I will buy a house a year because that is a lot but I am going to start with one and see how it goes. Drena assures me that I will be ok and I will be able to do it, so I hope she is right. I want to learn about investing in real estate so I can have a good foundation if I ever do get to quit my job (5 years). For the get rich quick scheme I am going to buy one of those stocks that I get an email about every other day...HA, just kidding, making sure you are still awake through my babble.

So, if you have ever wondered about real estate investing then I recommend this book. Beware though...he makes it sound incredibly easy. I will let you know if that is true or not as I embark on my landlord journey :-)