Prompted by an email from Amazon informing me that my copy of Money Talks, Bullsh$t Walks: Inside the Contrarian Mind of Billionaire Mogul Sam Zell (Affiliate Link) (which I can’t wait to start reading) has been shipped, I finally got inspired to finish my most recent book, Creating and Growing Real Estate Wealth (Affiliate Link). It was a great read and I recommend it to anyone involved with real estate, specifically those interested in founding and running their own companies.
In typical Poorvu fashion, the former head of the Harvard Business School Real Estate Program, the book explores a number of case studies walking through many different real estate success stories. As you’ll learn, few came easily or quickly. Most involved years of hard work; acquiring experience and building relationships with the many people you will need to help you achieve your goals (a little luck didn’t hurt either).
The book sets out to answer a number of questions including: What does a “typical” life in real estate look like? What are the milestones, pitfalls, and rewards? How can you create, grow, and use wealth successfully? How do your challenges and opportunities change over time? How can you make a difference? When is your product a commodity, with price being the key criterion? Alternatively, when can you add value through your skills at assembling the parts and providing services to your customers?
Poorvu thinks about the real estate career as having four stages:
- Starting Out. This is about building your foundation – your first job, your first deal. When starting out, getting the right job and the right training should be high on your priority list. This is the stage that I’m at and most of your probably are as well. If you have a job, think about doing your own deals on the side.
- Scaling Up. This is about finding the deal after your first deal. It answers how you scale up-how do you find the capital to do multiple deals, and when do you give up your day job?
- Hedging your Bets. This section reinforces that real estate is risky. All the case studies Poorvu walks through, the entrepreneur realizes some sort of hardship during a down cycle or are effected (effect vs. affect still confuses me) by externalities beyond their control. To survive is like surfing: No matter how much you practice, you still have to be willing to take risks. You have to alter your plans to take advantage of new realities. At the end of the day, you may have gotten a great ride, falling and getting up again…or you can get wiped out. Whether or not you are good at market timing, there are ways to minimize potential damage and to take advantage of the potential turnarounds in each cycle (this notion is particularly important today).
- Taking Stock. The final career stage has to do with understanding your later career options. It’s not just about harvesting profits. Depending on your circumstances, it may be about jumping back into the game. It may be about involving your family in the business, possibly over multiple generations. Although it may be counterintuitive, as you grow older-and as you start thinking about your legacy-your perspective may start becoming longer term.
By the end of the book, you’ll have followed the interesting roads to success of some of the most well-known real estate entrepreneurs including, Walter Shorenstein, Trammel Crow, Gerald Hines, and GGP founders to name a few. Ironically enough, I was reading this book amidst the GGP bankruptcy. All in all, I really enjoyed the book and highly recommend it. It’s a quick read and a book you’ll definitely reference time and time again.
If you’ve read the book, I’d love to hear your thoughts, if not, go pick up a copy.