Buy real estate at below-market prices

Whether you are a novice or “old pro” real estateinvestor, or a real estate agent involved with residential properties,”Buy Even Lower” by Scott Frank and Andy Heller is a “mustread” book. Written with easy-to-understand explanations, including manyreal-life examples, these successful investors reveal their three investmentstrategies and how to profit from each one.

Frank and Heller are full-time Atlanta corporate executivesand part-time real estate investors. How they find time for work, investmentsand family life is amazing. They have been realty partners for many years sothey obviously have a successful formula.

Purchase Bob Bruss reports online.

That formula is to buy single-family houses at targetedbelow-market prices, which depend on their goal for the acquisition. There arethree possibilities: buy and hold; buy and flip; or buy and lease-purchase,which is their favorite. They require a different discount from fair marketvalue for each category.

The authors favor buying “ugly and awful”properties, no matter what their intent is for that property. They likemiddle-income neighborhoods and houses with three bedrooms and two bathrooms.But they avoid near-perfect houses, which they leave to the “retailbuyers” who will pay full market value.

Although the authors have bought houses listed for sale withrealty agents, and have purchased residences in the various phases offoreclosure, they clearly favor buying REO (real estate owned) from lendersafter the foreclosure sale if there were no bidders at the auction. Theirreason is there is no emotion involved with the homeowners, and REO sales arestrictly business transactions.

This extremely well-organized book contains six “goldenkeys”: determine your minimum investor discount; know what good propertieslook like; find good properties; calculate maximum purchase prices; make solidoffers; and negotiate like a chess master.

As a longtime realty investor, I found this book a joy toread because Frank and Heller anticipated and answered most of the questions Iwanted to ask about their investment strategies.

By using many examples from their purchase experiences, theyemphasize what to do and to avoid when acquiring profitable investments. Yes,they made a few mistakes, which they readily admit. The only area I wish theyexplained with more detail is how they finance their acquisitions.

The favorite target strategy of Frank and Heller (althoughthey use all three methods) is to acquire houses with the goal of leasing themfor up to three years and giving their tenants a locked-in, guaranteed optionpurchase price.

As the authors explain, this method creates six profitopportunities for them while also being fair to their tenants. But, as alongtime user of lease-options, I would have appreciated more details of theirlease-purchase contracts.

A special feature of the book is a Web site for readers toaccess copies of a suggested purchase contract and other “goodies.”It sounds like Frank and Heller plan additional books in a series for “momand pop” real estate investors.

Chapter topics include “Becoming a Millionaire”;”Determine Your Minimum Total Investor Discount”; “Know WhatGood Properties Look Like”; “Find Good Properties”;”Calculate Maximum Purchase Prices”; “Make Solid Offers”;”Negotiate Like a Chess Master”; and “Bringing All the KeysTogether.”

This is one of the few real estate investment books thatcannot be recommended too highly. It reveals strategies for both beginner andexperienced real estate investors. While following the Golden Rule, Frank andHeller emphasize how all parties involved can benefit when investing in realestate. On my scale of one to 10, this superb book rates an off-the-chart 12.

“Buy Even Lower,” by Scott Frank and Andy Heller(Kaplan Publishing Co., Chicago), 2006, $18.95; 238 pages; Available in stockor by special order at local bookstores, public libraries, and www.Amazon.com.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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