Rain City Guide

Multi-family investments – recommended reading

Robert Gray Smith on 05 24, 2006

Generally I have an issue with most real estate books as they are usually advise on how to make a million dollars in 90-days or some similar hype. So it’s refreshing to come across the few books that are sound, practical advise on investing in real estate. The latest that I’ve read that fits into this practical advise category is The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges.

Let’s face it, with high vacancy rates and low rents, multi-family hasn’t been a great place to invest the last few years in the Seattle area. But with the increasing prices of entry level homes, number of condo conversions removing units from existing inventory and the increased interest rates the rental market is seeing renewed demand. So where do you invest and how do you analyze the deal?

That’s why I like this book. Steve Berges doesn’t promise to make you a millionaire overnight. Instead he lays out tax planning, case studies and financial analysis examples that help you develop some investment strategies. I was a finance major in college, plus several years at Microsoft brainwashed me with the metrics mantra – if you can’t measure it, it doesn’t matter. So I really appreciated the financial analysis part of this book. Sample spreadsheets on how to calculate different ROI scenarios and determine the best investment among several properties.

This isn’t an exciting, feel-good rich dad, poor dad type of read. It’s practical advise on how to get into the game, analyze your investment and calculate your exit strategy. For anyone contemplating multi-family investments, I highly recommend this book.

One last note — don’t spend useless hours trying to recreate his spreadsheets from the book. I wasted several hours on that before realizing the obvious — all his analysis tools are available on Steve’s website www.thevalueplay.com

About the Author: Robert Smith

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What do I know about Washington Real Estate? I’m a native Washingtonian – I grew up in south end of Seattle, in the Seahurst neighborhood, where my parents still reside. My twin brother and I are the youngest of 6 children (5 brothers, 1 sister) all of whom live in the local area. I attended the University of Washington where I majored in Business Administration with an emphasis in Finance. I come to Real Estate as an escapee from the high-tech industry. I spent 15 years in that industry, starting out with 4.5 years in marketing at Microsoft. I went on to run my own consulting company for 12 years and then helped start a second company, Resolute Solutions Corporation. During my high-tech years I invested in rental properties and did pretty well at it. So after 15 years in high-tech I decided to make a change and joined Coldwell Banker Bain.