How can I learn about the inudstry as a complete beginner? (Possibly stupid question)
Apologies in advance if this is a dumb question.
So, I'm currently a law student and my goal is to enter a field of law that doesn't pay well, and on top of that a job that pays even worse (it's a dumb passion thing. Don't ask.) Things being as they will be, I'm interested in ways of supplementing my income. While doing some very precursory looks, real estate caught my eye as an area of investment -- especially something like development. So, here comes the dumb question: How can someone with essentially no financial background learn about real estate? Learn about development? Keeping in mind my goal isn't to work at a place like Blackstone so I'm not pursuing an MBA. The research I've done seems to expect a baseline knowledge and background that I don't have. Any help would be great and extremely appreciated, even just pointing me in the right direction.
I think the first stop would be a search button, any keyword or phrases that comes into your mind. Eventually as you read on, and on, you will find a more focused discussion and/or topic you are interested in learning.
CRE would be the one to contact regarding anything real-estate wise. For development, I believe you need a few years under your belt, but I have read a few posters on here with law degrees going into RE firms as Associates, if I am not mistaken.
Damodaran has a good piece about RE valuation, give that a read.
Read Poorvu
This. Great intro read.
As I read this post this was exactly what came to mind. OP, William Poorvu is an HBS Professor and very active real estate investor. He authored two books, but the one you should read is "The Real Estate Game". It was written in 1999 but I would say 99-100% of the book is still completely applicable today.
Also, if you're looking for side income you should start in Residential. Buy a light fixer (just needs paint, carpet, landscaping). Maybe you'll make a few thousand, maybe you'll break even. But its good experience to help you get the next one. Many people start out with a light fixer then move on to du/tri/fourplex and transition into Commercial RE. Commercial is the major leagues and usually anyone who operates in that space alone has previous experience at very elite firms. And >90% of this site is dedicated to Commercial RE. Look up "Bigger Pockets" for some easy intro information. Good luck!
SoCal,
The Real Estate Game is one publication you mentioned. Any other suggestions for good, applicable reading material on this issue?
I've been toying with getting into RE from a personal investment position for years now, but have been reticent to get into rental property due to the potentially onerous renter rights that can make life hell for a landlord.
Have a paid-off house, completely debt-free and considering a potential move in a couple years. Trying to determine whether to sell, or just rent. The thought of being an absentee landlord concerns me, but owning a home that produces a stream of income is very enticing.
Also considering getting into commercial RE, but I never invest in anything I don't completely understand. What publication(s) give a detailed run-down on the in's and out's of the commercial RE industry.
Thank you in advance.
I haven't read that many books but I found Linneman's Real Estate Finance very helpful
Read “Making it in Real Estate” by John McNellis
I just finished that book yesterday. It is really easy to read and gives a very easy overview of the development and investment aspect of commercial real estate.
You don't want to develop part time (especially working attorney hours). Stick to buying existing assets.
In addition to the books above, I recommend the list below:
Overview of Real Estate Investment (Knowledge Base) 1) Essentials of Real Estate Investment By David Sirota, Ph D (This will give you a strong understanding of Real Estate) 2) What Every Real Estate Investors Need to Know About Cashflow by Frank Gallinelli If you have the funding look into CCIM 101, 102, and 104. 101 covers the basic financial analysis, 102 highlights how to conduct market analysis, and 104 touches upon financial analysis, market analysis, and decision making through quantitative and qualitative.
Overview of Numbers and Market Analysis (Technical Skill) 1) Foundation of Real Estate Financial Modeling By Roger Staiger Courses to look into REFM, BWIS, and PropertyMetrics.
I would consider getting a Real Estate License or go for your Broker's License in your state (I believe you can if you pass the board exam). If not, I would learn more about partnership and entity structures and market your legal skills and ability to draft documents. If you have a reputable presence in your market, you can invest equity in various deals. (My buddy does this, and she's making a decent part time income).
Beginner looking to learn the basics (Originally Posted: 05/16/2011)
Hi, I am currently looking to try and learn the basics of ER on my own this summer. I have talked to a couple people and they've suggested to: 1) Focus on 1 industry and make sure it interests you 2) Sift through 10Ks and Qs for all of the major companies within the industry 3) Understand the drivers of the business' profitability now and for future earnings 4) Look at what is driving revenue, supply/demand vs. expenses, any possible changes
Is this oversimplifying it? Any help would be appreciated guys.
Thanks.
For a summer project on learning the basics, that is a good start. It's a simple business, just not an easy one.
I'd add some time deovoted to listening to the quarterly conference calls. Listen to the questions the analysts are asking and try to get a sense of the main issues they are focused on.
Thanks a lot. Will definitely do that as well.
One of the key things that will distinguish you as an ER beginner is if you can distinguish between a company and its securities. Ask yourself questions like "this company is great, the management is great, earnings were great, but why is the stock down?" or "this company sucks, it sucks so bad earnings were negative but it was up today; why?".
that sounds like a good start. even though i'm not from a ER background it sounds like that's what the basics are, but what else can someone read/review to go over terminology if they're a finance major at heart?
Off the top of my head:
Here's a quick read: http://www.tilsonfunds.com/superinvestors.html
Thanks for all the advice guys, great info (and thanks for getting the ball rolling hoya!)
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