By Christopher M. Leporini, REALTOR® Magazine
Your Successful Real Estate Career By Kenneth W. Edwards (AMACOM) 240 pp., $18.95
Among the most sustaining introductory books about real estate, the new fourth edition of Your Successful Real Estate Career provides guidance for anyone new to the real estate industry and those who are considering real estate as a career. The book’s 18 chapters explore the basics of the real estate profession—from deciding if it’s the right career for you and how to get your license to the choices you need to make once you make the leap.
Author Kenneth W. EdwardsGRI is no stranger to the real estate business. After retiring from a 28-year career in the U.S. Air Force, Edwards began practicing real estate in 1978, and has been a licensed broker for the past four years. He has taught real estate licensing courses at an Oregon community college for more than a decade and devotes most of his time now to teaching and writing. He is the author of two other real estate books (Homebuyer’s Survival Guide and Homeseller’s Survival Guide). He also is currently book review editor for The Real Estate Professional magazine.
Your Successful Real Estate Career was first published in 1987 and has gone through three previous editions, with the fourth edition just released this year. According to Edwards, he based much of the book upon his own direct observations. Additionally, he conducted a written survey of several hundred real estate brokers and salespeople nationwide to examine what factors cause salespeople to leave the field; he quotes respondents throughout the book.
Tips for Real Estate Professionals
- Research carefully before choosing a brokerage. Deciding on a brokerage is a big decision. Talk to salespeople at local brokerages to get their insight on work atmosphere and employee satisfaction. You also should examine other factors, including local market share, support facilities (what the broker provides), MLS services, training programs, and office ethics. If possible, speak directly with the broker on policy questions since that person is ultimately in charge. Finally, narrow your list to a few top choices and begin contacting them. If your No. 1 choice doesn’t have an immediate opening, ask about the likelihood of future placement. If the company might have an opening within several months, it might be worth the wait.
- Hone your listing skills. Listings are the basic inventory of the real estate business, the author writes. For this reason, you should work on your listing skills early in your new career in real estate. Sources for finding prospects include your circle of influence, customers of salespeople no longer in the office, builders and remodelers, absentee owners, for-sale-by-owner properties, and expired listings. Preparation is key before the listing presentation. Your goal is to gather information to help the sellers decide how to price their home based on the prices of similar homes that have sold—or not sold—in the market recently.
- Prepare yourself to deal with difficult people. As a real estate professional, you’ll encounter many different personality types—not all of them pleasant. “Be on the lookout for indication of serious character flaws,” the author writes. If a customer seems dishonest, be careful to document everything in writing, double-check all information that you are given, and generally cover yourself. “It’s much better that you be overly cautious than end up trying to explain to a disgruntled broker why you were naïve enough to get conned.” Another problem arises from customers or clients who have you show them multiple properties but never commit to buying. Gauge buyers’ motivation and qualification early on to avoid wasting time.
- Consider expanding your career possibilities. Real estate is a broad profession that encompasses many areas besides residential sales. Appraisal, real estate finance, real estate counseling, and land development are just a few options that you might encounter in your early years. Explore these venues to find your perfect fit. Or you might decide to pass along what you’ve learned in your career by teaching real estate, either at a community college, real estate school, or through individual training seminars. “I can assure you that nothing will keep your batteries charged more, or your ego in check better, than teaching prospective real estate licensees,” the author writes.
By Christopher M. Leporini, REALTOR® Magazine
Real Estate Loopholes: Secrets of Successful Real Estate Investing By Diane Kennedy and Garrett Sutton (Warner Books) 213 pp., $16.95
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Real Estate Loopholes: Secrets of Successful Real Estate Investing continues the “Rich Dad’s Advisors” series with advice on how readers can capitalize on the tax advantages available to real estate investors to gain the maximum benefit from their properties. Whether you invest or you have clients who do, this book provides the know-how to do it wisely and have investments pay off.
Entrepreneur and real estate investor Robert Kiyosaki found a winning formula by contrasting the lessons that his financially unstable father and his mentor, a self-made millionaire, taught him about money. Espousing the pro-investment philosophy that the “the poor and the middle class work for money,” but “the rich have money work for them,” Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money—That the Poor and Middle Class Do Not! became a bestseller, inspiring several sequels from Kiyosaki and his co-writer Sharon L. Lechter, as well as the “Rich Dad’s Advisors” spin-off series, penned by other experts.
Authors Diane Kennedy and Garrett Sutton both have solo writing credits to their names for previous “Rich Dad’s Advisors” titles. Kennedy wrote Loopholes of the Rich: How the Rich Legally Make More Money and Pay Less Tax and Sutton authored Own Your Own Corporation andHow to Buy and Sell a Business. Real Estate Loopholes distills their experiences into a relatively reader-friendly format that includes anecdotes illustrating loopholes and investment strategies in practice.
In addition to sections on tax and legal secrets, the book also provides criteria and formulas to evaluate potential real estate investment properties. The book covers only seven of the more than 100 loopholes available for real estate investors, according to the authors. For information on other loopholes, they recommend going to http://www.taxloopholes.com for tax strategies and free tax tips.
Tips for Real Estate Professionals
- Real Estate Professional. As a real estate professional, you can offset unlimited real estate losses on the properties you own against all other forms of income. If you file a joint tax return with your spouse, you can offset all real estate losses by the total income of the household. In many cases these are only paper loses. For instance, the government allows you to take a deduction for depreciation losses on real estate, even if the value of the property has actually gone up.
- Sell Now, Tax Later. You can use several strategies to postpone paying taxes on gains you make from property sales, according to the book. For example, you can set up a charitable remainder trust (CRT). This is an irrevocable trust, which means that you can’t change your mind once the CRT is put in place. The CRT provides for and maintains two sets of beneficiaries—income beneficiaries and charitable beneficiaries. The income beneficiaries, likely you and your family, receive a set amount of income from the CRT during their lifetime. The charitable beneficiaries then receive the principal upon your death. The CRT is a good strategy for someone who has a highly appreciated piece of property and a charitable heart. The CRT works like this. You donate a property to the CRT and then receive an income tax deduction; the amount of the deduction is calculated as the present value of the remainder amount that will eventually go to the charitable beneficiaries. The CRT can then sell the property without paying taxes on the sale and reinvest the total amount for the benefit of the income beneficiaries. According to the book, the amount that the income beneficiaries will receive depends on the payout percentage that has been established and the amount of income the assets generate within the CRT.
- Real Estate Investing With Your Pension Plan. Do you have a self-directed pension plan, such as an IRA, Keogh, SEP, or Roth IRA? If so, you can use the funds to invest in single-family and multi-unit homes, apartment buildings, co-ops, condominiums, commercial properties, improved or unimproved land, subject to certain restrictions. Among these restrictions are rules prohibiting you from:
- Purchasing property that you personally own or have previously owned. Additionally, your spouse and members of your family, except for siblings, cannot have owned the property.
- Purchasing the property for any reasons other than investment purposes.
- Live in or lease the property. Nor can your spouse or any member of your family, except for siblings, live in or lease the property.
- Locate your business on any part of the property.