“Build a Rental Property Empire” by Mark Ferguson is interesting for the fact that he builds his rental property empire by purchasing residential single-family homes. It is interesting because this is in direct contrast to another book that I read called “Zero Down” by Monica Main (https://militaryfamilyinvesting.com/2020/10/13/5-takeaways-from-zero-down/). In her book, she recommends investors buy commercial residential properties that are 5 units or greater (apartments). So now I have both perspectives on real estate. One focusing on single-family or multi-family residential homes and another on larger commercial residential complexes. I actually like both techniques. It really all comes down to your particular market. I feel that my market in Florida is going to be multi-family homes that are less than 3 units. Here we have homes that are single-family homes on large lots. People end up adding multiple manufactured homes to their properties. These are the properties I would like to focus on.
Back to the book. This book is a detailed account of how to buy and rent homes. If you do not know anything about buying homes and renting them, this is the book with which to start. Since I already know something about buying and renting, I was more focused on different ways to finance more properties. I learned a lot of updated techniques that I did not know about. Also, I learned that I probably should get my Florida real estate license. If I am going to be buying 1-2 homes a year, I should probably learn to invest as an insider. With that, let’s get into my 5 takeaways.
1) Always keep a down payment and financing on hand. Many people want to pay down their mortgages, but having cash and financing on hand will allow you to get the best deals, fast. In order to find great deals where you pay 20% under market value, you have to be in a position to move fast. Always have a way to pay for your homes.
2) Cash Flow is King. The reason that people invest in rental homes is for the cash flow. Set a goal of how much cash flow you want to obtain and start building your empire. I personally want $6,000 a month from rental properties. Once I hit that mark, then I will create a new goal.
3) Don’t invest for appreciation. Appreciation is when the value of your home goes up. If you invest for appreciation and your home isn’t cash flowing, you may be heading for trouble. Ensure your home cash flows the day you start renting it. Appreciation is just a bonus.
4) Use leverage. Leverage is using a loan or other people’s money. Debt can be bad if used incorrectly. Things such as buying huge cars and boats will not make you richer. However, when used with caution, debt can be a valuable source of wealth. If you had $100,000 cash, you could buy one home cash, or use debt to buy 5 homes with 20% on each. Learn how to use leverage to achieve your goal faster.
5) Only 2% of the people ever buy rental properties. There are so many ways to invest in real estate nowadays. There are also so many seminars, books, online courses, and coaching. However, in the end, you have to take action. Many people are fearful of debt and the challenges associated with owning rental property. However, with knowledge, savings, and humility, you can be very successful in real estate. One of my favorite methods to invest in real estate is by renting out rooms in your personal residence. This is a great way to get a taste of being a landlord.
“Build a Rental Property Empire” is a great book for young investors. This is a book about buying and holding properties. This is my preferred method, as opposed to flipping. I came away even more eager to buy more homes. I also learned that getting my real estate license will assist me in investing from the inside. I highly recommend this book for any real estate investor, even if flipping houses is your goal. The techniques here will be applicable if you get in a situation where you cannot flip your home for some reason. Buy this book if you want to start building your financial independence empire!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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