What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures

An excellent resource for those interested in evaluating real estate investments from a mathematical standpoint.

This is the best book on the market covering real estate finance. Gallinelli teaches you how to 'run the numbers' with a fair amount of good humor and practicality. He never talks down to the reader, nor does he assume that the reader is a rocket scientist. Indeed, most readers, especially those who cringe at math, will come to see how easy the financial figuring side really is after reading this book.

This is the book to read BEFORE you read all those other formula-laden tomes. After reading this book, I now have a much better understanding of REIT financial statements. If you are serious about real estate investment, start with this book first. In it, you will learn the four principal ways money is made in real estate, how to convert features of a property such as location and size into cash flow, how to comparison shop between different properties, and most important, the key questions to ask when presented with all of those rosy financial statements for properties. He also takes you through a very thorough and comprehensive explanation of cash flow, the time value of money and internal rate of return- all of which are important and inter-locking aspects dealing with the proper valuation of commercial real estate.

Once you are done with this little gem of a book, consider picking up a copy of his other book on financing commercial real estate purchases. In my opinion, that one is somewhat better than this one in one key respect: in that book, he not only imparts a sound investment approach to purchasing commercial real estate for the novice investor, he also gave a clear and crucial warning about the dangers of 'no-money-down' investing. I believe that both books are a good form of positive reinforcement.

I used to work for a commercial real estate brokerage firm. When I first started, I could not believe how clueless some of the brokers and owners of income-producing properties were about cash flow. Most of the mom and pop owners of real estate do not even understand what a cap rate is. If you are serious about real estate, you must read this book and memorize everything in it. The book is written in simple English that anyone can understand. Paying $16 for a book that can save you thousands of dollars in mistakes seems like a deal to me.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Rarely does a real estate book get into the business and financial evaluation of real estate. Instead they talk about techniques at best or imposible to believe real estate "war stories" at worst. This a great primer for properly understanding cash flow and rate of return...the true bottom line.

I have encountered may property owners who are actually losing money by focusing on the wrong metrics or no metrics at all. They think they are making money, while actually lowering their long term net worth. The author does try to pitch his programs to readers and visitors to his website, but the book does a good enough job explaining how to do your own calculations.

The first part of the book builds up your understanding of financial concepts from the basics to the advanced. The second part is more a reference index to each concept or measure described in the first section with examples and commentary.

For everyone even THINKING about RE investment - from an agent's perspective to that of the investor, it is required reading. I've been back to it 20 times and 99% of the time, the answer I was looking for was there.