Investing in Income Properties. Rosen Kenneth D.

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      Kenneth D. Rosen

      Investing in Income Properties

Investing in Income PropertiesSecond EditionTHE BIG SIX FORMULA FOR ACHIEVING WEALTH IN REAL ESTATEKenneth D. Rosen

      Copyright © 2017 by Kenneth D. Rosen. All rights reserved.

      Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

      Published simultaneously in Canada.

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       Library of Congress Cataloging-in-Publication Data

      Names: Rosen, Kenneth D., author.

      Title: Investing in income properties: the big six formula for achieving wealth in real estate / Kenneth D. Rosen.

      Description: 2nd Edition. | Hoboken: Wiley, [2017] | Revised edition of the author’s Investing in income properties, c2008. | Includes index.

      Identifiers: LCCN 2016058038 (print) | LCCN 2016059764 (ebook) | ISBN 9781119390572 (cloth) | ISBN 9781119390596 (pdf) | ISBN 9781119390589 (epub)

      Subjects: LCSH: Commercial real estate – United States. | Real estate investment – United States.

      Classification: LCC HD1393.58.U6 R67 2017 (print) | LCC HD1393.58.U6 (ebook) | DDC 332.63/24 – dc23

      LC record available at https://lccn.loc.gov/2016058038

To Ellen with love, for her abiding faith and confidence in me

      Acknowledgments

      As you read this book, you'll understand how important it is to assemble the right team to help you with your real estate investments. The right team was also crucial in the writing of this book, and I am most grateful to all those who shared their expertise, advice, and inspiration as this project unfolded.

      I am especially grateful to my personal editor, Mary Dempsey, who worked tirelessly day and night. Without her, this book would not have been possible. Mitch Chefitz planted the seed for the book, and Bill Falloon at John Wiley & Sons made sure it saw water and sunshine. Many thanks to Taylor Larimore for recommending me to Bill, and to Emilie Herman, Laura Walsh, Christina Verigan, Kathryn Hancox, and Michael Henton at John Wiley & Sons for their editing and excellent follow-up work.

      I regret that two friends, my mentor David Probinsky, who always was an inspiration, and Philip A. Thomas, who shared a depth of knowledge and wisdom with me, did not live to see this book's publication. Their impact on my career was considerable.

      Between the book's first publication and this updated version, I also lost another close friend who offered tremendous support with this project. Dick Weiner, who recommended Mary Dempsey to me, also served as my sounding board, coach, and confidant, and he kept me on track.

      Jason Krieger, a skilled wordsmith and my technology connection, burned the midnight oil with me on more than one occasion. My longtime attorney Joe Reisman has offered his wise counsel throughout my career.

      I am grateful to real estate investor Phyllis McHenry, who devoted many hours reviewing technical material in the book and making suggestions that were very important to the final text. And Robert Rivera brought his exceptional graphic design skills in creating a cover for the book.

      I would be remiss if I did not acknowledge the many other colleagues and friends who helped me bring this book to fruition. They include: Gina Anderhub, Alicia Baro, David Dabby, Rosie DeRosa, Tony DeRosa, Anthony Dilweg, Tom Dixon, Bob Gallaher, Bobby Glick, Julian Goldstein, Sandra Goldstein, Phil Leitman, Hal Lewis, Joe Martinez, Ed Mazzei, Ted Pappas, Jim Pollack, Andy Roberts, Britt Rosen, Al Sherman, Saul Silverman, Scott Sime, Herbert Lee Simon, Ashley Socarras, Debra Spadafora, Cliff Suchman, Larry Suchman, Bob Valledor, Ana Vega-Garcia, Maurice “Moe” Veissi, Roger Villarreal, and Martin Waas.

      Introduction

      The United States has recovered from the Great Recession, which started in December 2007, ran through 2009, and resulted in the loss of 8.9 million jobs. As this book goes to press in early 2017, the current economic revival has pumped life into the real estate arena, which is an important driver of the economy. Interest is at historically low rates – a great thing for borrowers – and commercial real estate is red hot. People seeking to grow their wealth without relying on the volatility of the stock market are finding that income properties are a better investment than ever.

      Good quality income properties in top locations remain vibrant and healthy – and these are the kinds of properties that I spotlight in this book. They comprise apartment buildings, small shopping centers, office buildings, and industrial properties. Even if the country dips into another recession, Big Six properties will remain in strong demand.

      As far back as I can remember, the demand for top-grade properties has always exceeded the supply – and it is no different today than it has been in the past. These types of properties are hard to find because only a small percentage of owners will sell them. However, buying one of these top-grade properties does not guarantee that you will make money. That will come from those properties among them that meet the Big Six criteria, which is the focus of this book. The Big Six is a formula that I developed many years ago. Using it will virtually ensure your success and bring you great wealth, just as it has done for me.

      I started my own career with $300, and since 1975 I bought and sold $500 million in income-producing real estate. It was because of my drive and adherence to the Big Six formula that I eventually became financially independent. I am going to share with you the strategies and techniques that brought me success throughout my career. And I will also tell you about my setbacks. By the time you finish reading this book you will have the tools to achieve your own success – most likely in a shorter period of time than it took me.

      I realize that this book will be read by a wide spectrum of people, including investors and potential investors, some with a small amount of cash to invest and others with substantial financial resources. I will be principally dealing with income properties in the price range of $500,000