Table of Contents
Im not a genius. Im just a tremendous bundle of experience.
DR. R. BUCKMINSTER BUCKY FULLER
From left to right: Dr. R. Buckminster
Bucky Fuller at eighty-six years old with
Robert Kiyosaki in 1981. Buckminster Fuller
was an American architect, author,
designer, futurist, inventor, and visionary
. Recognized as one of the most
accomplished Americans in history,
he dedicated his life to a world that worked
for all things and all people.
Acknowledgments
For years I have been an advocate for financial education. While many other financial advisors are telling people what they should invest in, I have been telling people to invest in themselvesto invest in their own knowledge. That is what I have done, and it has made me rich. I have also been telling people to surround themselves with great teachers who are actively practicing what they preach. The creation of this book was made possible because of the people I consider my teachers. Each one has a lifetime of experience and a lifetime of knowledge. And each one knows the importance of continual learning.
The contributors to this book generously gave of their time and their talent so that you could see the possibilities, avoid the pitfalls, and understand the methods of building wealth through real estate. They have recollected their great achievements, and they have revealed their painful failures. I thank them for their openness. The lessons we learn from our own mistakes and the mistakes of others are the most powerful.
These people are not only my advisors, but they are also my friends. Together we have been through the ups and downs of the real estate cycle, ridden each wave, and made money doing it. These are the friends I run my ideas and my deals by. And because they are friends, I know that they will give me their honest opinions. I thank them for that, too.
Id also like to thank Jan Ayres and Kathy Heasley of Heasley & Partners, Inc., who took this book from ideas on a flip chart to a finished manuscript. Special thanks to Rhonda Shenkiryk of The Rich Dad Company and Charles McStravick of Artichoke Design for their work on the books cover. Finally, thank you to my wife, Kim, who more than twenty years ago said yes to a guy with no money and a lot of ideas.
Introduction: A Note fromRobert Kiyosaki
Why a Real Book of Real Estate
There are four reasons why I think a real book of real estate is important at this time.
First, there will always be a real estate market. In a civilized world, a roof over your head is as essential as food, clothing, energy, and water. Real estate investors are essential to keeping this vital human need available at a reasonable price. In countries where investing in real estate is limited or excessively controlled by the government, such as it was in former Communist Bloc countries, people suffer, and real estate deteriorates.
Second, there are many different ways a person can participate and prosper with real estate. For most people, their only real estate investment is where they live. Their home is their biggest investment. During the real estate boom from 2000 to 2007, many amateurs got involved with flipping housesbuying low and hoping to sell higher. As you know, many flippers flopped and lost everything. In true investor vocabulary, flipping is known as speculating or trading. Some people call it gambling. While flipping is one method of investing, there are many, more sophisticated, less risky ways to do well with real estate. This book is filled with the knowledge and experiences of real, real estate investorsreal estate professionals who invest rather than flip, speculate, trade, or gamble.
Third, real estate gives you control over your investments, that is, if you have the skills. In the volatile times of early 2009, millions of people were losing trillions of dollars simply because they handed over control of their wealth to other people. Even since the middle of 2008, the great Warren Buffetts fund, Berkshire Hathaway, has lost 40 percent of its value! Millions of people have lost their jobs, which means they had no control over their own employment either. The real, real estate professionals in this book have control over both their businesses and investments. They will share their good times and the bad times with you. They will share what they have learned while learning to control their investments and their financial destiny. The learning process is continual.
And, finally, heres my real reason for this book. I am sick and tired of financial experts giving advice on real estate, especially when they do not actually invest in real estate. After my book Rich Dad Poor Dad came out, I was on a television program with a financial author and television personality. At the time, in 1999, the stock market was red hot with the dot-com boom. This financial expert, who was a former stockbroker and financial planner, was singing the praises of stocks and mutual funds. After the stock market crashed in 2001, this man suddenly resurfaced with a new book on real estate, portraying himself as a real estate expert. His real estate advice was beyond bad. It was dangerous. Then the real estate market crashed and he dropped out of sight again. The last time I saw him, he had written a book on investing in solar energy and was claiming to be a green entrepreneur. If he were to write a book about what he really does, his new book would be about raising bulls... and selling BS.
There are other financial experts who know nothing about real estate, yet they speak badly about real estate and say it is risky. The only reason real estate is risky for them is because they know nothing about investing in it. Instead, they recommend saving money and investing in a well-diversified portfolio of mutual fundsinvestments which I believe are the riskiest investments in the world, especially in this market. Why do they recommend investing in savings and mutual funds? The answer is obvious: Many of these professionals are endorsed by banks, mutual fund companies, and the media. Its good business to plug your sponsors businesses and products.
Commissioning this book gives the public its first chance to learn from real, real estate investors, friends, and advisorspeople who have been through the ups and the downs and who walk their talk. This book gives them the opportunity to share the spotlight with the many media financial experts and speak the truth. These real estate experts are true pros, and youre about to move beyond the media hype. I hope you are ready. The Real Book of Real Estate is the real deal.
PART 1
The Business of Real Estate
TOM WHEELWRIGHT
CHARLES LOTZAR
WAYNE PALMER
ROSS MCCALLISTER
CRAIG COPPOLA
GARRETT SUTTON
BERNIE BAYS
The Business of Real Estate
Tom WHEELWRIGHT
Tom Wheelwright is a rare combination of CPA, real estate investor, and teacher. He has the ability to take the complex and often boring subject of tax and tax law and make it into something thats simple enough for a person like me to understand.