“Real estate” is a big topic, and a lot of people starting out aren’t even sure where to begin.
There are so many aspects to learn about.
Mortgages. Landlording. Purchasing. Selling. Leverage. Investment criteria. What constitutes a “deal.” How to choose a market. How to negotiate. How to evaluate a property. Repairs. Maintenance. Accounting. Notes. Rehabs. Flips. Hard money. Partnerships. Trainings. Boot camps. REIAs. Mobile homes. Apartment buildings. Single family residences. Condos. Legalese. Paperwork. Taxes. Estate planning. Auctions. Foreclosures. Short sales. Probate. Yellow letters. Wholesale. Retail. Marketing. Realtors. And on, and on, and on.
It’s easy to see why one might feel overwhelmed even thinking about where to start learning.
My advice is to start slow. Start with the basics. As you begin to research, many different side-tangents will come up. Don’t worry about chasing down every thing you don’t understand, and going down every path.
Focus on the fundamentals of how to invest in real estate. Don’t worry about fancy tricks, like investing with no money down*.
*Totally possible, but 95% of the information out there consists of scams or bullshit. Wait until you’re well versed in the basics before diving into stuff like this.
There is SO MUCH high quality, free real estate information out there.
Once you run out, you can start paying money for it (and by that time, you’ll be able to spot the scam artists).
With that in mind, there are a few resources I’d suggest you start with, as a beginner.
Books are amazing. An author can delve deeply into a subject and cover many aspects related to it. I’m going to talk about some online resources later in this post, but an hour long podcast, or a forum post, or a few hundred, maybe even a few thousand word blog post can only go so deeply into a subject versus a several hundred page-long book.
I’ve read dozens, and dozens of real estate books, and have narrowed down my favorites for you here.
First of all, my favorite real estate book for beginners is Building Wealth One House at a Time by John Schaub.
It uses very plain, direct language to explain how one can become financially independent with real estate, going through the whole process of purchasing, rehabbing, and renting out properties. It lays out a simple plan of purchasing one house per year for ten years. It doesn’t get bogged down in technical details that often derail beginners.
There are some caveats to this book (I think his appreciation assumptions are unrealistic, which is the biggest flaw in it, in my opinion, and it skews some of the math in the book), but overall it’s a solid place to start to wrap your head around the various concepts.
If you have limited real estate knowledge, perhaps limited to having purchased your own primary residence, but not much experience with purchasing properties to rent out, I highly recommend starting with this one.
After that, you may want to decide what you what to do in Real Estate in order to decide what path to start researching. There’s real estate books for every topic under the sun. Someone wanting to landlord versus rehab versus wholesale versus focus on SFRs versus commercial versus mobile homes versus mobile home parks versus storage units, etc. etc. etc. should all be focused on different things. So what are you looking to do?
Figure out what niche you want to focus on, and then target some good books in that area. That being said, here’s a few recommendations of some more “generic” books that I’ve enjoyed that may help you in the more common real estate pursuits.
The Unofficial Guide to Managing Rental Properties by M. Prandi is great. Lots of gems in it. I actually had it in PDF form and loved it so much I bought a physical copy for my bookshelf.
Investing in Real Estate by Gary Eldred is a good general knowledge book.
2 Years to a Million in Real Estate by Martinez and The Weekend Millionaire’s Secrets to Investing in Real Estate by Summey and Dawson are both decent books (both give fairly generic advice, but good to reinforce the concepts to make sure your head is fully wrapped around them).
What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures by Gallinelli is a good book with lots of formulas if you’re into the math part of deal analysis. You can read a mini-review of Gallinelli’s Cash Flow book on the MMM forums by member grantmeaname right here.
Landlording: A Handymanual for Scrupulous Landlords and Landladies Who Do It Themselves by Leigh Robinson is a useful guide for someone landlording their own properties. It’s fairly large, and better used as a reference manual than read straight through.
Many (all?) of those you should be able to find used (I linked to the Amazon copies, above, and many have used options for purchase, for example). I’d recommend you go to your local public library and check if they have any of the above books, but also just find their real estate section and browse. Pick up any that look interesting, and check them out. You never know what gems you’ll discover.
(Rich Dad, Poor Dad is often cited by real estate investors as an inspiration source, but I’m not even bothering to link to it for a number of reasons. In any event, it doesn’t have much in the way of actual real estate investing information, beyond a generic “you should do it” instead of “buying liabilities”.)
BiggerPockets.com is a great resource for those starting out. They have a vast forum you can browse to read different questions people have, a blog where authors with various real estate backgrounds post articles, and a podcast that interviews real estate investors about their stories. They have an enormous amount of information coming out all the time, and a trove of information in their archives. You’ll spend many hours with their content, and it’ll totally be worth it, you will learn a lot.
Later on, you may get annoyed at the misinformation in the forums (the amount of quality posters you can probably count on your fingers, and the amount of wannabes make the signal-to-noise ratio very low), the formulaic podcasts, and the shallow blog posts. Keep in mind they’re catering to a certain group of people. When you know very little, you want to soak up as much information as possible, and they have a lot of information, even if it isn’t in-depth. Your goal is to move past being part of the demographic they’re targeting, to where their information is old hat, and/or you can spot the flaws. At that point, you’ll be ready to move on to other, more in-depth material.
Do not try to skip this phase of your real estate investing though. They have a lot of great information to start out, just not in-depth enough for an intermediate-to-advanced investor.
MMM Real Estate Forums
The Mr. Money Mustache forums have their own real estate section. A lot smaller than BiggerPockets, but with a generally higher signal-to-noise ratio. Less quantity of information (good in that it doesn’t take as much time to keep up with, bad in that there’s less overall content), but a higher percentage of quality information.
Local REIAs / Meetup.com
Meeting up with other real estate investors can be a great way to learn about your local market and network with other people in your area. Look for local real estate investor associations (REIAs) in your area. Check meetup.com for local real estate meetup groups. The BiggerPockets forum also often has people setting up meetups to meet with other local investors.
Be wary; many of these meetups are thinly-disguised sales pitches. Don’t buy anything. Find good meetups where you can learn and share information, network with other investors, and get recommendations for vendors, contractors, managers, agents, etc. You can learn a lot, and even make some friends, at these meetings.
There were many a time where I, despite being exhausted after work, dragged myself to a Wednesday night real estate meeting. Or, despite wanting to sleep in, got up early on a Saturday to attend a meeting. I attended nearly all the meetings in my area for several years, and got to know the players in the market, and the pretenders. I saw many people come, profess an interest, and never show up again. Other people would show up sporadically, here one month, gone for a few months, then back. While I understand that life happens, I decided early on to make this a priority: “I don’t feel like it” would never be an excuse not to go. So I went. And I learned. And I formed partnerships. Got referrals and recommendations. Made friends. And it was totally worth it. If you’re going to be serious about this, commit. It’s well worth it.
One of the first things people often want to know about is: which legal forms should I be using?
Due to obvious reasons (primarily the fact that I’m not a lawyer, and that I have no idea where your specific area is, and your particular local laws are what’s relevant), I can’t provide exactly what you need, but I can tell you where you might be able to find them.
Often you can find a packet of real estate legal forms (house offer/purchase contract, tenant application, lease, etc.) available for purchase at your local office supply store. I do not recommend these (and, in fact, am not even linking to the equivalent on Amazon). These forms are super generic, and not at all tailored to your specific area. Instead, here is what I recommend.
Forms From Your Local Realtor’s Association
Your local Realtor’s Association likely has their own recommended forms for putting in offers on a house, for a lease for tenants, etc. These forms are superior to the generic ones, as they’re likely tailor-made to be compatible and in compliance with your local and state laws. They’re likely checked by lawyers familiar with these regulations, and battle tested in court. These are the places to start when looking for good forms.
Forms From Local Property Managers
Similar to the local Realtor’s association, any local property managers worth their salt will have quality documentation relevant to your area.
Local Landlord/Tenant Laws
Reading the actual law may sound boring, but it is crucial to understanding what is, and is not legal in your area. To understanding what the expectations and requirements of you are. I recommend you read your local laws regarding real estate, multiple times. Go directly to the source. Google for your local landlord/tenant laws and read them directly. Most of them are written fairly cleanly/legibly, without a lot of legalese (the lawmakers want tenants to be able to understand them).
The above is just my opinion on the best places to find them, and, of course, if you want the ultra-safe route, you should consult a lawyer who practices in this area to review these forms. Starting with a form for them to review is generally a much cheaper method than having them try to write something from scratch.
I hope all these various resources–books, online, and otherwise–have been useful for you!
And, of course, experience is the best teacher, so you’ll learn by actually getting out there and doing it. But since a book, or forum, or podcast is much quicker–and cheaper–to learn from than a real estate deal, get as much knowledge into your head as you can–without succumbing to analysis paralysis–before you do so.
Let me, and other readers, know in the comments any other resources you recommend, or if you have any other resources you’re looking for that I can add to this post!