Real Estate Riches

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REAL ESTATE
RICHES
How to Become Rich
Using Your
Banker’s Money
Dolf de Roos, Ph.D.
John Wiley & Sons, Inc.
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REAL ESTATE
RICHES
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REAL ESTATE
RICHES
How to Become Rich
Using Your
Banker’s Money
Dolf de Roos, Ph.D.
John Wiley & Sons, Inc.
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Copyright © 2005 by Dolf de Roos, Ph.D. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or
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specifically disclaim any implied warranties of merchantability or fitness for a
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Library of Congress Cataloging-in-Publication Data:
De Roos, Dolf.
Real estate riches : how to become rich using your banker’s money /
Dolf de Roos.—[New ed.]
p. cm.
Originally published: New York : Warner Books, 2001.
Includes index.
ISBN 0-471-71180-2 (pbk. : alk. paper)
1. Real estate investment. 2. Real estate investment—Finance. 3. Mortgage
loans. I. Title.
HD1382.5.D47 2004
332.63'24—dc22
2004058398
Printed in the United States of America.
10
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Contents
Foreword by Alex Rodriguez
vii
Praise for Real Estate Riches
ix
Acknowledgments
xiii
Preface: I Don’t Have a Job. Shame!
xv
PART ONE
Why Is Property So Good?
CHAPTER
1
CHAPTER 2
CHAPTER 3
CHAPTER 4
CHAPTER 5
CHAPTER 6
Four Magic Questions
Conspiracy Theory
A Taxing Issue
Beating the Averages Easily
Yes, But . . .
Summary: Why Invest in Real Estate?
3
19
27
33
63
69
PART TWO
Okay! Show Me How to Do It!
71
7
CHAPTER 8
CHAPTER 9
CHAPTER 10
CHAPTER 11
CHAPTER 12
The 100:10:3:1 Rule
Finding Properties
Analyzing Deals
Negotiations and Submitting Offers
Getting High on Opium (aka OPM)
Massively Increase the Value of Your
Properties (Without Spending
Much Money)
Managing Your Properties
73
81
101
109
119
CHAPTER
CHAPTER
13
PART THREE
CHAPTER
14
CHAPTER
15
Liftoff!
Residential versus
Commercial Property
Government Interference
1
129
137
149
151
169
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16
CHAPTER 17
CHAPTER
CONTENTS
The Eight Golden Rules of Property
The World Is Your Oyster
173
181
Appendix: Other Books by Dolf de Roos
187
About the Author
189
Index
191
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Foreword
B
aseball has blessed me with a sensational career and an
avenue to reap rich financial rewards. However, the hard
work does not stop in the baseball diamond, nor does it
end with the paychecks. I am acutely aware that many
professional athletes are paid well for their talents but, sadly,
are victims of poor financial planning.
When I landed my well-publicized 10-year, $252 million contract, I set about finding an investment vehicle that would ensure
my financial fitness long after baseball. I read many books on
wealth, entrepreneurship, and investing, as well as biographies
of successful individuals, but nothing inspired or captivated me
as much as Real Estate Riches by Dolf de Roos. Dolf makes real
estate investing simple and accessible to anyone who has the will
to succeed. He is an All Star in his field!
On my journey to verify the opportunities available in real
estate, I met with Joanne Mitchell, a good friend and local real
estate advisor who owns and operates several thousand apartments in Miami. She immediately recognized the copy of Real
Estate Riches under my arm and consequently pulled her copy
out from her desk. Her book had been highlighted, and notes
had been scribbled in the margins—it had been an inspiration
to her as well. This book holds powerful recipes for prosperity.
I had to meet this wizard of real estate called Dolf de Roos.
After great effort due to scheduling conflicts, we met in Dallas.
To his surprise I was a baseball player and not a basketball
player, and to my surprise he was accessible and eager to teach
a newcomer his strategies. Clearly whether you are on the
baseball field or a field slated for real estate investing, life is a
numbers game. Some days you score big, and others, well . . .
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FOREWORD
you don’t; but if you practice hard, learn from your mistakes,
stay focused, and above all have passion, then the numbers
start to work in your favor and your success fuels even more
success.
I credit Real Estate Riches and Dolf de Roos as valuable
guides that helped give me the confidence to form Newport
Property Ventures. I began by investing in a small duplex in an
emerging area of South Florida, which led to the acquisition of
several other income-producing properties. With hard work
and determination my projects and portfolio continue to grow
with phenomenal returns. Dolf’s principles are working strong!
That Dolf has passion is apparent from the first few pages
of this book. This passion and enthusiasm for his game is even
more apparent when you meet him in person. Recently we met
in New York where we once again reviewed the principles that
lead to great success in a newfound sport from which I will
never have to retire!
—Alex Rodriguez, #13
M.L.B. American League MVP
Founder and CEO, Newport Property Ventures
August 2004
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Praise for Real Estate Riches
“I have always been interested in property but have never had
the courage to admit to myself that property is in fact a passion
of mine and not just an interest. Your book, Real Estate Riches,
has helped me make that final leap and as a result I have decided to pursue my passion and restructure my life to make
more time for real estate investment.”
—Paul Dinis, South Africa
“I read your book, Real Estate Riches, and I loved it. Thanks for
breaking things down in such a simple fashion. I am now looking to get into real estate investing.”
—Mike Desroches, New York
“I just closed my first Las Vegas property last week and want to
thank you for pointing me in the right direction and giving me
the tools to begin my investing. I feel like I have begun building
my real estate dynasty! I am very happy; thank you so much!!!!!!!!”
—Pamela, California
“Thank you so much for the great book Real Estate Riches.”
—Moshe Mizrachi, California
“I have read Dr. Dolf de Roos’ book titled Real Estate Riches.
Two weeks ago I bought my first rental flat, then a week later
my first rental building (six flats). It’s magic to create wealth
out of thin air. Thank you for your inspiring books.”
—L.C., France
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PRAISE FOR REAL ESTATE RICHES
“I bought your book Real Estate Riches and your course Property Investor’s School and used the information to buy a $1.2
million commercial building. Thanks for all of the great information. I couldn’t have done the deal without the information
I learned from you. I used your advice to do the deal and immediately raised the building value by $160,000.”
—Sam Beckford, Vancouver, Canada
“I have just finished reading your book Real Estate Riches. The
information was helpful and encouraging. Thanks for your
willingness to share your experiences.
“Along with my partner (older sister) I am a novice investor. Six
months ago, we purchased our first property, a six-unit commercial building. Last week, we made an offer on a second
commercial property. So far, it is exciting work. I hope that the
excitement and profits continue!”
—Mike W. Sanderson, Virginia
“I have just completed your book Real Estate Riches. What a
great book.”
—Brian Hunter, Boulder, Colorado
“I am a mother of four and awaiting my turn in ‘real estate
riches.’ (That was a great book; I’m reading it again.) Because
of the book Real Estate Riches, my husband and I felt bold
enough to take over my parents’ property (they didn’t want
to deal with the mortgage anymore). We refinanced, took
money out, and now are in negotiations to buy an investment property. Dolf de Roos helped us to think out of the
box.”
—Vivienne Piña, California
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PRAISE FOR REAL ESTATE RICHES
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“I have recently joined a real estate company and have read
your book Real Estate Riches. I am a keen businessman, and after reading your book property makes a lot of sense. Thank you
for the great inspiration.”
—Rudi Maritz, South Africa
“I recently purchased one of your books (I already had Real Estate Riches). I just wanted to say that I am really enjoying them
and I can’t wait to actually get out there and utilize the principles. Thank you so much!”
—Mark Smith, Kentucky
“I just wanted to pass along a thank-you for inspiring me to
start my real estate investing career. I have been successful in
one jointly owned short-term rental property. I am in the
process of laying the basic foundation for residential rentals
and hope to own my first one June 2004.
“Out of all the real estate gurus I’ve listened to and read, you
have reached me the most. The message I received from your
books is a source of constant inspiration for me whenever I need
it. I love your can-do attitude and upbeat personality. I hope you
will continue to write and pass on your experiences.”
—Patrick Mintel, Florida
“Just finished Real Estate Riches and enjoyed it very much.
Can’t wait to continue my search for the riches.”
—Becky Moran, Erie, Pennsylvania
“I read your book Real Estate Riches, and found it both empowering and life changing. THANKS. You added value to my life.”
—Wikus Strydom, Cape Town,
South Africa
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PRAISE FOR REAL ESTATE RICHES
“Thank you for your assistance. I greatly appreciate your time
and the valuable information that you have bestowed upon
me. This new thinking has changed the direction of my life.
Thank you.”
—Emily F. Henderson, California
“Dear Dolf,
I bought your books
I bought your tapes
I bought your seminar
I’ve made millions because of you.
Thanks. I listen, I learn, I do!”
—Steve Gronlund, California
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Acknowledgments
M
y thoughts, theories, methods, mistakes, successes,
wins, and learnings in real estate have been formulated over many years. Countless people have—wittingly or unwittingly—contributed to my thinking,
from real estate agents, bankers, mortgage brokers, and appraisers to tenants, members of real estate investment associations, and thousands of investors (both budding and
experienced) who have honored me by attending my events
and who have forced me to expand my thinking. While it is impossible to acknowledge everyone, an array of people deserve
and have my deep appreciation. If I have missed you, then I
apologize in advance; know that my appreciation is real
nonetheless. Sincere thanks go to Trevor Quirk, David Henderson, Mike Pero, Stephen Witte, Kevin O’Gorman, David Grose,
Charles Drace, Stephen Collins, Paul Wright, Ron Whiteley,
David Thompson, Allen and Kenina Court, Robert Tybon, Dr.
John Baen, Diane Kennedy, Tom Wheelwright, Ann Mathis,
Kim Butler, Gene Burns, Andy Fuehl, Carrie Putman, Stefan
Kasian, Cindy Kenney, Claudia Brelo, Ross Denny, Randy
Carder, and Andy Driggs.
On the publication front, I would like to sincerely thank my
agent, Larry Jellen, for his vision and confidence. Laurie Harting and Mike Hamilton at John Wiley & Sons, Inc., are a delight
to work with, as are Pam Williams and Ken Burlington at the
National Association of Realtors.
Finally, I would like to thank my parents for never having
told me—not even once—“You can’t do that!”
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