Starting point
Real Estate Investing: Advantages, Disadvantages, and Reality
Reading order: starting point
Best for: if you are only thinking about starting to invest in Real Estate
Difficulty: 4/10 (fairly straightforward). Reading this 1-2 times should be enough to understand main points.
About: the text outlines some common misunderstandings about Real Estate investing, provides examples, and prepares your mind for possible challenges ahead.
Why: check if you see yourself in business like this after reading the pros and cons
allocation of capital
Investing, Value, and the Role of Capital
Reading order: 1/4
Best for: readers who decided to start investing in real estate (info is useful for other types of investing as well)
Difficulty: 6/10 (moderate difficulty). You may need to read the text 3 or more times to internalize the knowledge.
About: this text outlines the fundamental aspects of what investing is and why to earn returns is not a gamble, but a normal process of investing
Why: you need to build a foundation on which further knowledge will be built on. Without understanding basics, it will be very difficult to comprehend the other points about investing.
On Value and Return
Reading order: 2/4
Best for: readers who have already familiarized with fundamentals of investing.
Difficulty: 7/10 (above moderate difficulty). You may need to read the text 3 or more times. Concept of Present Value and future cashflows can get challenging to grasp.
About: the article introduces ideas of how value can be calculated and compared across investments.
Why: no investment should be made if an investor cannot understand and base their reasoning for choosing a specific property. Understanding value and return is extremely important.
The Architecture of Risk in Real Estate
Reading order: 3/4
Best for: readers who are already well aware of how asset values are calculated and why some investments are prioritized over others.
Difficulty: 9/10 (high difficulty). You may need to read the text 5 or more times to fully understand it. The subject requires a lot of abstract thinking. The concept of risk is the most deceptive and important of all.
About: the text introduces what risk is in real estate, why it is important, and how an investor should approach it.
Why: risk and returns are interlinked. When making investment decisions an investor takes risk. In order to be successful one needs to be fully aware of what risk is worth taking, and how to manage it.
The Mechanics of Leverage
Reading order: 4/4
Best for: readers who are already familiar with the concept of risk and planning to use debt to finance their investment properties.
Difficulty: 8/10 (high difficulty). You may need to read the text 4 or more times. Understanding how return and risk are redistributed by debt instruments can be confusing.
About: the text explains how debt works in real estate investments. The article discusses way more than just a simple calculation of returns. It investigates aspects of leverage for a business setup which are often ignored by investors.
Why: it does not require much intelligence to calculate rent income and mortgage payments. However, debt also redistributes risk in the investment portfolio. This is often ignored and can result in investors taking excessive risks without being aware of it.
Often misunderstood concepts – explained
Real Estate Rewards Competence – Not Hope
Reading order: optional
Best for: readers who are wondering if real estate investing is a good choice for their skills.
Difficulty: 4/10 (fairly straightforward). Reading this 1-2 times should be sufficient to understand the ideas.
About: this article is discussing aspects of competence of managing a real estate business and how it is different from a passive investment in other financial instruments.
Why: many novice investors have a false belief that real estate investing is a source of passive income. However, in reality it requires a lot of skills and these skills can be your source of competitive advantage in this business.