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The Complete Guide to Real Estate Finance for Investment Properties: How to Analyze Any Single-Family, Multifamily, or Commercial Property

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Manufacturer: Wiley

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Binding: Hardcover
Dewey Decimal Number: 332.6324
EAN: 9780471647126
ISBN: 0471647128
Label: Wiley
Manufacturer: Wiley
Number Of Items: 1
Number Of Pages: 288
Publication Date: 2004-09-06
Publisher: Wiley
Studio: Wiley

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Customer Rating:

Summary: Author knows nothing of basic finance
Comment: The author actually described the valuation of a bank CD as simply dividing the cash flow by the interest rate - a perpetuity valuation! But one does not receive the CD cash flow for eternity. A CD is a single cash flow that requires a simple time-value discounting.

This teaching is akin to describing how the planets orbit the sun based on the theory of electromagnetics, or how a hybrid car runs so efficiently because a little gnome is in the engine turning a handcrank! A complete lack of conceptual understanding.

The author also goes on to define "single-family housing" as having 4 or fewer units and "multi-family housing" as having 5 or more units - a definition that is cumbersome at best and downright knuckleheaded at worst. This distinction is important, but it is the distinction between residential (single, duplex, triplex, or quadraplex) housing and commercial (multifamily) housing.

Other organization of the book is just poor. For example, in discussing useful financial ratio, the author introduces ratios using the net operating income (NOI) before actually defining the NOI a few pages later. (I won't get into the fact that NOI is introduced as another "ratio", although it's not; it's a dollar value off of the income sheet.)

Customer Rating:

Summary: lots of info to digest
Comment: you may want to read this book two or three times to make sure you understand the information. More for an experienced investor with complex formulas. But once you understand them and then apply them they make perfect sense. Anyone thinking of buying multi family or large commercial properties should definetly read this book.

Customer Rating:

Summary: Terrible!!!
Comment: I study with this book in my Real Estate Finance class. It's terrible. There is nothing new here. It's only about basic finance but, he changed the terms to look fancier. These new named financial terms are so much confusing. There are also so many errors in this book. Moreover, the author never stops talking about his achievements. I'm so sick of this book. I can't believe that they pick up this book for us to study.

Customer Rating:

Summary: Not the book for new investors or for financial analysis
Comment: In my opinion, as a non-author, this book is poorly written.

The book gives examples on financial calculations that can be done to determine if a piece of property is a good investment. However, the examples given are either too complex to be meaningful outside of the specific situtation or too simple to gain any understanding.

The second section of the book on "case studies", is not made for new investors. The examples involve huge sums of money and very complex situations. Two examples come to mind: One case study discussed buying an apartment complex in an overpriced area, another rambled on about legal trouble he had with a local zoning board. A simpler more straight forward example of properties would be much more valuable.

I also did not appreciate the fact that his company is plugged throughout the book. I guess it offers some value in that he has actually experienced the situations in the book but I cannot help but think this book was written only for the benefit of his company and not to eduate the readers. I have read many real estate books written by many successful investor who never mention their company's name. He mentions his constantly.

This book may make sense for investors with large cash reserves($500,000+) in that it explains some creative ways to identify ways to improve a property and it is written from real experience, but in general I do not recommend it.

Customer Rating:

Summary: Author Makes Errors and states his opinion as fact
Comment: I purchased this book with good intentions and have never written a negative review on a book, but I had to go out of my way to make note on this book. Although I can see how others could find value in the book, the author lost his credibility with me after two chapters of me underlining statements he was making that he stated as fact when they were just his opinion. I won't get into every detail, but for example he classifies real estate investors as short-term, mid-term, or long term and then states "the long term investor won't care about purchase price" (what is he talking about?) and then fails to understand the fact a long term investor can capture appreciated gains through monetizing the asset (i.e. the house) through additional equity lines or refinances, rather than state this simple fact which is very important as it would allow a long term investor to avoid transaction costs and tax implications but still receive cash from the appreciation he states the long term investor will hold the home not very leveraged; that is totally untrue many long term investors are highly leveraged and continually borrow against their properties and appreciation. Anyway, not a big deal but atleast he didn't call his book the "Bible to Real Estate Finance" or something like that because it is not. It is a great subject matter and topic and he stated he may be one of the few people to have written a book on this narrow topic for a lay person, but the book lacks a professional polished work; take it for what you can get out of it and question things.

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Editorial Reviews:

This practical, real-world guide gives investors all the tools they need to make wise decisions when weighing the value and potential of investment properties. Written for old pros as well as novice investors, this friendly, straightforward guide walks readers step by step through every stage of property analysis. Whether you're buying or selling, investing in big commercial properties or single-family rentals, you'll find expert guidance and handy resources on every aspect of real estate finance, including:

Proven, effective valuation techniques
Finance tips for all different kinds of property
How various financing strategies affect investments
Structuring financial instruments, including leverage, debt, equity, and partnerships
Measurements and ratios for investment performance, including capitalization rates and gross rent multiplier ratios
Future and present value analysis
How the appraisal process works
Primary appraisal methods-replacement cost, sales comparison, and income capitalization-and how to know which one to use
How to understand financial statements, including income, balance, and cash flow
Case studies for single-family rentals, multifamily conversions, apartment complexes, and commercial office space
A detailed glossary of important real estate terminology