ClydeBank Media - Real Estate Investing QuickStart Guide

Introduction

Ive created this book for the pre-investor, the individual who knows little to nothing about real estate investing but wants to know if such a pursuit is right for them. Given the way that popular media portrays real estate investing, I want to dispel the misconceptions and expose you to the truths of real estate. I want to show you how you can go from merely surface-level knowledge on the topic to an in-depth understanding of real estate as a way to make money and grow your wealth. More than that, I want to show you what to do, when to do it, and how to take each step along the way.

I received degrees in computer engineering and economics from UC Irvine. Figuring that two degrees were not enough, I went on to earn my MBA from Stanford. I began my real estate journey when I was hired out of school to work on commercial real estate acquisitions at a private equity firm without having any prior real estate background. Talk about getting thrown into the deep end. I was taught by immersion about the ins and outs of commercial real estate. I oversaw deals across a wide range of asset classes, geographies, and sizes. I mastered the tools used by institutional investors to evaluate investments. Ultimately, I helped the firm evaluate, acquire, stabilize, or exit from investments that were worth at least $500 million upon exit. From there, I went on to become a global mergers and acquisitions manager for Ingram Micro, a Fortune 80 company. I then landed a role as the head of marketing analytics for Panda Restaurant Group, the parent company for Panda Express, Panda Inn, and Hibachi-San.

Working at Panda, I was supporting the real estate team using the knowledge I had acquired in my previous professional roles. Taking notice of my acumen for real estate, some of my colleagues began discussing the possibility of forming an investors club, a means of pooling our money to make investments. We ended up moving forward with this idea and calling it the Weekend Fund, because everyone involved had full-time jobs. With my knowledge and experience, I put together a framework for how we should proceed. Before long I was the groups go-to analyst. The other group members trusted my judgment when it came to crunching the numbers, assessing potential risk, profits, etc. They would often run a potential deal by me, and I would work through the details, deciding if it was worth our time to take it further. Ultimately, any deals pursued by the Weekend Fund committee required unanimous consent from the membership. But unless a proposed deal could pass my analytical scrutiny, it would not be considered.

In our first two years, the Weekend Fund acquired and stabilized rental properties exclusively in Nevada and Arizona, during a period where home prices in those markets were at a lull. Later, we expanded our portfolio and our reach, looking at rental units in Texas and California. At one point, we managed over thirty rental properties.

My work as the group analyst of the Weekend Fund began to attract some outside attention. I was asked to advise a man who had inherited a retail property from his aunt. After looking over his figures, I was able to help him sell off the property and pocket $360,000 more than hed anticipated. Good times! I had another high-net-worth client in Asia who needed some options for parking his wealth. I laid out several ideas for real estate acquisitions, such as the flagship store and headquarters for a Hispanic grocery chain in Orange County, which, per my analysis, would provide the best overall returns. But this investor was more interested in the prestige of the acquisition than an absolute return on investment ( ROI ). He elected for option B, to invest in several properties currently under lease by BJs Restaurants, a swanky American restaurant chain based in Huntington Beach, known for its famous Pizookie desserts and selection of craft beers. In another consulting gig, I advised a residential developer on the inclusion of various select features in his homes. I showed him how adding $55,000 worth of add-ons could boost his resale value by $200,000.

As I spent more time analyzing real estate investments from many different angles, I became more keenly aware of some of the dynamic factors affecting real estate investing. I decided to pursue an in-depth study of the new phenomenon of short-term rentalsthink Airbnb, Vrbo, or FlipKeyfrom an investors perspective. I currently run one of the oldest and most popular blogs on short-term rentals, www.learnbnb.com. I also co-authored Airbnb for Dummies for investors who want to learn more about this exciting new dimension of real estate investing.

In addition to the investing I did through our Weekend Fund collective, I began to build out my own personal portfolio. At the time of this writing, I am still an investor in over 150 real estate investment properties. Though many of my plays in real estate are traditional, direct investments, the majority of my holdings are through syndicates. This approach has helped me achieve my goal of securing a comfortable passive income while building wealth at the same time through appreciation of my assets.

Before I tell you about my ongoing endeavors as a coach and mentor for aspiring real estate investors, I want to share my motivations for teaching this entrepreneurial art form. One of my students knew nothing about real estate investing six years ago, but after taking my course, he interviewed for a job out here in California, my neck of the woods. He moved here from Atlanta and has now become one of the youngest VPs at a major development firm. Another student, also with no real estate experience, took my course. He then moved into several analyst roles and has just been tapped to run his own private equity firm.

As exciting as investing has been for me, I discovered two important truths that showed how I could give back and inspire others. The first truth was that the knowledge surrounding investing was for everyone. I noticed that sophisticated investors would use a certain set of common tools and methods to analyze their large-scale investments. I found that these tools and methods could be easily learned by private, individual investors as well. In other words, the same techniques used to assess massive multimillion-dollar projects could be applied to the single-family rental home down the block.