The fourth section is about the investment. But if you've only been involved in apartment buildings, you might not think to add that to your contracts. I was pretty excited (remember I'm on a board that manages an office building syndication where our physician partnership is housed) because it boosts the income and return of the property. I remember the first time I learned about CAM charges. You don't typically see CAM charges in multifamily properties but they are common in office buildings and retail centers.” “Common area maintenance (CAM) charges are amounts charged to tenants of a commercial property under triple-net leases to pay for common area maintenance, including landscaping, insurance, common area utilities, and such.
Dozens of pearls are contained, such as this one:
In a straightforward, logical manner, he goes through the basics, bottom-up analysis, discussion of both gross and net income and the typical ways they are presented, performance indicators, debt structure, capital improvements, cap rates, and valuations. Should you buy into this property or not? What is your return likely to be? This goes on for 134 pages.
#The hands off investor how to#
The third section of the book describes how to evaluate properties. Just don't confuse being a test pilot with being a fare-paying passenger flying on a fully tested plane.” There's nothing wrong with that as long as you're aware that's what you are signing up for and willing to accept the extra risk. Investing with an untested syndicator makes you a test pilot. The only people allowed on untested aircraft are test pilots. “No airline passenger would ever board a plane that hadn't proved in the real world that it can both take off and land. Most importantly, Burke tells you what the right answers should look like. You want to know what you should know about a sponsor before investing with them? This book contains a comprehensive list. A bad one (or worse, a fraudulent one) can ruin even the best deal on paper. A great sponsor can make lemonade out of a lemon investment. The first thing to evaluate with a private real estate investment (and I'm in complete agreement on this point) is not the investment. The second chapter in the first section and the entire second section (two more chapters) are where the book really begins to shine. Both are classic mistakes that lots of real estate-focused investors make all the time, and this book is no different in that regard. There is also far too little discussion in the book about the use of retirement accounts. You just have papers describing what you bought (which includes properties, machines, and other “hard assets”). When you buy into a syndication, you don't have any more of a hard asset than when you buy into Amazon or Apple. Plus, the first category in that table is “hard assets.” Well, let's be honest. Like most real estate books, the argument for real estate is a little over-exuberant to the point of being misleading.įor example, he includes a table suggesting that real estate has tax advantages and can be leveraged but stock investing does not and cannot. It will introduce you to the basic terms in this space and do as good a job as anyone to convince you to include these investments in your portfolio. The introduction and first section lay out the case for real estate and particularly private real estate syndications. If you can't get through the book, well, you should probably stick to the Vanguard REIT Index Fund as your chosen real estate investment. If you are considering investing in private real estate investments, particularly individual syndications, you should probably read this book first. Perhaps the best way to think about it is that it's the equivalent of an online course compressed into a far less expensive book (it was < $15 on Amazon the last time I looked). It has 358 pages, and there is something useful on every one of them. This is not a quick, easy read nor is it particularly entertaining it took me most of the year to get through it. Burke's credit), the book surprisingly doesn't contain a plug to invest with Praxis the way most books written by financial professionals do. Physician Wellness and Financial Literacy Conference – Park Cityĭespite the obvious conflict of interest (and to Mr.Continuing Financial Education – Las Vegas.Financial Wellness and Burnout Prevention for Medical Professionals.
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