The Danger In Reading About Real Estate Investing

There is a real danger when you only “read about” real estate investing and then try to apply that. And I don’t care if you are talking about Loral Langemeier’s Guide to Wealth Cycle Investing or you are reading my blog.

But today, I’m going to talk a little about Loral’s book. I picked it up because everyone I run into says they’ve read it and it’s great. Unfortunately, I didn’t preview before buying. Where can I go to get my $24.95 back?

I didn’t find anything too Earth shattering under the cover. Sure it was an okay read and it skimmed over many different options. But that’s the point, isn’t it? It’s just skimming.

I am in real fear of someone reading her chapter on Real Estate and then deciding to become a real estate investor. But not quite in as much fear as if they’ve watched some show on A&E.

What she does, she does well. She covers the basics and moves quickly from topic to topic. She gives just enough information that I question whether she knows the details or holds those back until you pay for her coaching. If you are not knowledgeable enough to discern the difference, you could get yourself in serious trouble.

Her whole philosophy on buying $45,000 rental houses is flawed. (Where are those located and in what condition? Do you have any idea the headaches $45,000 houses can become?) She is also happy about the fact, or at least not worried, that these homes won’t have any appreciation. Excuse me? Isn’t that one of the reasons to own real estate investment property? She advocated NOT buying in high growth, high appreciation areas…at least to start. And her explanation of depreciation is incomplete at best, incompetent at worst. There is so much more to know on that topic alone.

Listen, I don’t know Ms. Langemeier and she is probably ten times more wealthy than I am. And obviously much more knowledgeable on a whole host of issues. I’ll grant you that. But on THIS SUBJECT I want to be clear…don’t invest in real estate just from what you read.

I recommend two books on this blog and you can find them in the right hand column. But you can’t rely on them 100% either. For instance Gary Keller’s pie-in-the-sky examples are comical. I like the worksheets he uses. But the examples are not available in most markets. (Any market?) And John Schaub’s refusal to buy anything but single family homes is not a tenet that I hold dear.

If you want one more example just take a second and think about the Bible. Here God gave us an actual manual to use to live our lives in peaceful coexistence with one another while serving His needs and His kingdom. And yet, how have we screwed it up? We have 3,000 denominations (or more?) because no one can agree on exactly how every verse should be interpreted.

So it’s no wonder real estate investment pundits cannot do any better.

2 Comments

Filed under Personal Real Estate Opinions, Real Estate Investing, Worth Reading

2 responses to “The Danger In Reading About Real Estate Investing

  1. Brian Brady

    I was given Loral’s book “The Cash Flow Machine” as a gift; it was oh so average. I’ll be seeing her at a mortgage conference next week.

    I loved your Bible analogy.

  2. Chris Lengquist

    Thanks for stopping by. I’m sure Loral is a great gal. I just worry about her readers’ responses to incomplete game plans.

    But then, we can all be guilty of that.

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