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You can learn from this successful investor's missteps

March 07, 2004|Robert J. Bruss | Special to The Times

Successful Real Estate Investing

How to Avoid the 75 Most Costly Mistakes Every Investor Makes

Robert Shemin

John Wiley & Sons: 241 pp., $16.95


In "Successful Real Estate Investing," investor Robert Shemin shares 75 costly realty mistakes to avoid. He warns of errors he has made with his investments during the last 10 years, involving more than 400 properties.

Shemin explains how he started his realty investment career after talking with an elderly couple who looked broke but owned 120 free-and-clear houses netting more than $60,000 per month. After that encounter, the author gave up his "day job" at age 28 to devote his time to real estate investing.

In a humorous aside, he adds that before he got married he asked the couple, who had been married more than 50 years, for marital advice. The husband said that when they married, he and his wife agreed he would make all the big decisions and she would make the small decisions. "So far, there haven't been any big decisions I've had to make," the husband added.

Shemin, whose property holdings are down to 148 ("I've bought and sold 75 properties in the last five months") is now semi-retired in Miami's South Beach and writes real estate books and teaches real estate courses. But he says the "big money" is in real estate, not from his other fun activities.

This memoir is sound, basic real estate investing advice presented in an unusual format. Each of the very short 75 chapters is formatted to state a mistake, followed by an example or what can be learned from the mistake. To illustrate, the first mistake is "not getting started in real estate investing early enough." Shemin concludes the brief chapter by saying, "The lesson is this: The time to get started is now."

Along the way, he gives lots of advice, which isn't exactly a mistake. For example, one of his mistakes: "Not becoming active in your local real estate investor's association." Then he adds, "Going to a monthly real estate meeting is like going to a religious institution on a regular basis. You already know what's going to be said and how the stories end, so why keep going? It's because when you do attend, your belief system is reinforced (or challenged)."

Shemin shares lots of personal experiences, plus those of other investors and students he has encountered. His strongest advice comes when explaining negotiation tactic mistakes, such as "making only one offer on a property instead of three." He recommends giving the property seller three offers with different terms to increase the odds of acceptance.

Some of his advice is offbeat and unexpected. For example, mistake 34 is "overlooking bad houses and bad neighborhoods." Then Shemin explains that sometimes it's possible to contract to buy a rundown house in a rough area, not necessarily for keeping but for making a quick resale profit by assigning the purchase agreement to a buyer who specializes in low-end properties. "The lower on the economic scale you go, the higher the percentage of the return you'll make. But there's money in high-end properties, too," the author advises.

The book's appendix includes explanations of how to find great deals, the "top 10 real estate mistakes we make every day," Shemin's six basic rules of negotiation, lease-option strategies and how to build a real estate team.

Whether you are an experienced or novice investor, this is the kind of book that should be read and reread because there is so much sound advice.

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