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British & Far East Traders


Real Estate Riches by Dolf de Roos. Ph.D


Notes

british & far east traders & partners, real estate riches, real estate notes

BRITISH & FAR EAST TRADERS & PARTNERS

[email protected] / britishfareasttraders.co.uk


The following entries are excerpts from the book from Rich Dad Advisors series called Real Estate Riches by Dolf De Roos PhD. 


British & Far East Traders does not intend to infringe on the author's intellectual property rights. If you think these notes may cause problems than otherwise intended, please email us at [email protected]


The study lasted more than seven months. I read biographies, autobiographies, the relevant parts of encyclopedias, books, and magazines about the rich, and interviewed as many wealthy people as I could. What I found astounded me. 


In fact, after more than seven months of study, I could only find two things that the rich had in common...


First, almost without exception, the rich had integrity. Their word was their honor. If they said something, you could count on it. That's not to say that if you don't have integrity you cannot get rich. But I believe that if you don't have integrity and get rich, your lack of integrity will also be part of your subsequent and almost inevitable demise. And since integrity is not purely genetic, there is a lesson in this for everyone. 


The second feature that the rich uniformly had in common is that almost without exception, the rich either made their wealth, or kept their wealth in real estate. 


Upon that realization, I decided to get into property. 


I remember thinking to myself: 'Why would anyone in their right mind agree to work for forty hours a week, for forty-nine weeks of the year, turning up every morning at 8:00AM and saying, 'Hello boss, here I am again, what would you like me to do today?', when in one week you can do a deal worth $35,000 and take the rest of the year off?


If there is something in these pages that inspires you to find a great deal, I will be happy. Conversely, I will not mind if you decide not to get into property. But I could not forgive myself if in ten years you said to me: 'I would have got into property, only no one ever told me it was this good'. 


Successful Investing! 

BRITISH & FAR EAST TRADERS & PARTNERS

[email protected] / britishfareastttraders.co.uk

Part 1:

Why Property is so Good!




The purpose of this book is not so much to give you the 'how-to' of real estate- although there will be plenty of how-to advice- but to make you sit bolt upright and exclaim: 'Wow, I never realized real estate was this good!' The reason is that once you 'get it', once you understand why property is such a phenomenally lucrative and astoundingly simple investment vehicle, you will never be able to focus on a sitcom on television again without getting itchy feet, wondering whether the hour wasted watching the tube is costing you the Deal of the Decade. You will be itching to apply my how-to ideas (and those gleaned from other books and sources), and you will also want to invent your own and go out there and try them, modify them, and continually improve them. 


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The most common reason why properties are sold at way below their true value is, unfortunately, divorce. When people are blissfully married they can reason lovingly and at length, but when things go awry, the battlers want instant results. So it is agreed to sell a jointly owned home, the owners generally want each other out of their hair as soon as possible, and they therefore want their money out fast. There is no time to prepare the property for a good sale, and sometimes even no time to get an updated appraisal. Let's just sell the property NOW, split the proceeds, and never talk to each other again.


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Not getting an appraisal is surprisingly frequent reason why properties are sold way below the market value. 


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Sometimes, the owners are simply too stingy to engage the services of an appraiser. They think that by saving the appraisal fee (typically around $500 for a single residence), they are putting that money in their pocket, when in actual fact, they may be depriving themselves of many of tens of thousands of dollars of potential sale price. 


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Very commonly a property may be sold by people who have vested interest in getting the true market value for it. This is often the case with foreclosure situations, where the bank is mainly interested in getting its mortgage back, but also occurs when people are asked to look after someone else's affairs. 


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Magically, when that same house is painted, the masses will see it as a cute cottage in excellent condition that they could move into instantly, that would be a delight to live in, and that they could (instantly) show off to their friends. Perception is reality. 


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Well, so much for our first idea on how you could increase the value of your investment in property. There are many other ideas... You may increase the value of your property by replacing the rusted gutters and downspouts on the front, by putting a new heating/ cooling system, by changing the curtains or drapes, by modernizing the bathroom, by putting in a new kitchen, by painting the roof, by erecting or replacing a fence, by installing an alarm system, by fitting new doorknobs throughout, by changing the window shades, by adding a swimming pool, by removing an old shed, by cleaning the carpets, or by paving the driveway. 


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On commercial properties you can increase the value by finding a tenant for a vacant space, by splitting a large area that may be worth only $5 per square foot and for which you have no tenants into two smaller areas worth $7 per square foot and for which you can easily get tenants, by (again) painting it, by agreeing to a longer lease length, by attracting a better tenant, or by replacing the carpets. 


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My aim in writing this chapter is to share with you why I think property is not just as good as other investments, not just a little bit better than other investments, and not even just much better than other investments, but tens and even hundreds of times better than other investments. 


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My belief is that whereas most other investments do not offer significant leverage, property offers tremendous leverage through the generous application of mortgage financing. What's more, unlike with other investments, you can often buy properties at prices significantly below their true value, you can do things to them to further increase their value way beyond the cost of improvement, and you do not need to sell to reap huge benefits from the increase in value.  


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notes to be continued...