ABC’s of Real Estate Investing by Ken McElroy
By: Russ Harriger
Having seen a review of the book by a Morgan Financial Fellow, I felt compelled to share my thoughts coming from a (well) seasoned property management professional.
When Peter Morgan handed me this book on real estate investing, my instinctive question was “ I have been in the business for 42 years, mostly in property management, will this be a good read for me?”
The answer is yes.
This was a very informative book that covered the process from identifying the product to purchase, based on several criteria, due diligence and the importance of finding the hidden gems and hidden problems ahead of the purchase. It is factual to say that after the purchase, these undiscovered headaches become the buyers. The author provides a very helpful synopsis of how to determine a value using the buyer’s criteria and analyzing the information provided by the seller. He used real world examples of deceptions that data (and unscrupulous sellers) can produce without the buyer taking the actual hands-on approach of walking every inch of the property to determine what is actual. In my career, I have assisted landlords in both roles; as seller, working with the buyers to provide information for their upcoming purchases such as leases and financial statements, and I have worked with buyers completing property inspections and reviewing leases to make sure that the buyer is receiving what the seller has stated.
In each of these cases, the attention to detail, as Mr. McElroy mentions in the book, is what separates a good deal with financial gain from a deal that only delivers expenses and surprises. In real estate, surprises are not happy ones like found money, they are usually unexpected, unrecognized expenses. This attention to the details is mentioned time and again by the author as the most important part of the investment.
The book brought forward many interesting processes, such as identifying properties that have potential by recognizing the presence of potential tenants, location and economic conditions with potential for growth. These factors and more are considered when finding the right investments.
Finally, I was happy to see that the author put a strong emphasis on Property Management. I am a bit biased with this subject, having made a nice career in this business. The author is right when he states that property management is sometimes a thankless job, but he is also correct that this position is a problem-solving role. I have found great satisfaction in solving problems for tenants that lead to tenant retention and in the long run a sound cash flow for the landlord. Mr. McElroy mentions that a good property manager understands the owner goals and can manage the property, the cash flow and the improvements towards the investment goals. He reiterates that that is key to this response.
In summary, the author shares his years in property management and investments of apartments through real world examples of the process, with his successes and failures along the way, in order to enlighten the reader in the world of real estate investment.
The writer of this review is a Senior Property Manager located in Charlotte, NC and handles the shopping center management duties and responsibilities for Morgan Legacy Partners.
Russ Harriger RPA CPM
Senior Property Manager
Primax Services, LLC
Charlotte, NC 28204