ABCs of Real Estate Investing by Ken McElroy

Ken McElroy is one of the most successful real estate investors in the history of the profession. Many of you will recognize Ken from his collaborations with Robert Kiyosaki, author of Rich Dad, Poor Dad.

From the introduction to ABCs of Real Estate Investing, we learn that Robert spent years encouraging Ken to write his story. Eventually, Ken took time away from deal-making to document his path to success.

Robert did the world a great service by encouraging Ken to put pen to paper. And Ken, thank you for stepping up. Time to explore this book!

Myths and Magic

ABCs of Real Estate Investing starts off by debunking myths. Tell someone that you’re an entrepreneur, especially a real estate entrepreneur, and you are likely to hear unsolicited advice from this list. The author addresses some common myths about real estate investing. Here are a few:

• You must be wealthy to invest in real estate.
  Nope. There are ways to help wealthy people by putting their money to work. Help others, help yourself, and everybody wins.

• Start small. Big deals are too risky.
  Nope. We reduce risk by building teams of experts who work together.

• Some folks just have the Midas touch.
  Nope. If a skill has been learned by others, that skill is learnable by you if you put in the work.

You’ll find the complete list of myths in the book.

Real-World Deal Stories

The book contains real-world examples of deals pursued (and sometimes closed). The author uses a story about a 100+ unit property in Surprise, Arizona to drive home the point that asking price is simply the seller’s opinion of what a property is worth.

As investors, we must use our own analysis tools to determine what we’re willing to pay for a property. Learn more in this post about underwriting.

Employment, Demand, and Rent

When discussing the link between employment and rental demand, Ken points to two cities in Arizona, Fountain Hills and Scottsdale. Both are attractive communities. However, Scottsdale’s robust base of employers makes that town attractive to residents with high-paying jobs. Residents who earn more can pay more for rent. And that revenue stream drives value.

Highly Recommended

As an Arizona-based real estate investor, I appreciated Ken’s local examples and his lessons from the school of hard knocks. Investors, entrepreneurs, and business leaders will all get value out of this book. Of the books on my shelf, you can count ABCs of Real Estate Investing as highly recommended.