If you were to ask, "What's the one recent book I should read about investing in real estate syndications to get the basics before I start?," the list of possibilities would definitely include Brian Burke's The Hands-Off Investor: An Insider's Guide to Investing in Passive Real Estate. This book might even be the winner for some readers as a combination of specific, practical, and actionable advice in a pretty tight package.
Other candidates for that title might have an edge in different ways. Matthew Picheny's book, The Backstage Guide, which we reviewed here, might be more fun to read. Sean Cook's Investing in Real Estate Private Equity, which we reviewed here, is surely more comprehensive. Where Brian Burke's The Hands-Off Investor shines is that it is concise, to-the-point, and just about real estate syndication investing.
Burke knows what he's talking about. As CEO of Praxis Capital, Burke has been involved in the real estate syndication industry for a long time. As his About the Author bio tells us, Praxis is "a vertically integrated real estate private equity investment firm. Brian has acquired over half a billion dollars’ worth of real estate over a 30-year career, including thousands of multifamily units and more than 700 single-family homes, with the assistance of proprietary software that he wrote himself. Though he prefers to reposition existing multifamily properties, he has also subdivided land, built homes, and constructed self-storage."
The biggest plus about Burke's book is that he gives insider tips to the passive investor from the perspective of the syndicator. In particular, Burke spends a lot of time focusing on something we harp on at this site: selecting the right sponsor (or syndicator) for your deal. Burke gives away many of the secrets that some syndicators prefer to keep from you, unearthing the kinds of questions you might ask to get at these hidden aspects of a proposed deal. For instance, Burke unveils for you how to cross-check various assumptions that the syndicator has made in their pro formas that might affect whether or not you want to do the deal. You can never decide on a deal based on a pro forma set of projections alone, but it surely makes sense for you to do your homework to decide whether those projections are realistic or just a pie-in-the-sky hope that's intended to get you to part with your investment dollars.
Burke's book also does a nice job on something else we focus on here: the exact steps you go through to make your syndication investment and then what to expect once you've wired in your hard-earned cash. Of course, we'd like to think you've gotten a good dose of that here at Syndirater--and we keep updating you with free content on this blog--but Burke's book is well-worth the investment in time and money to go deep on what to expect. His findings squared pretty well with everything we've experienced.
In his conclusion, Burke writes: "One of the reasons I wrote this book is to arm you with knowledge so that you don't invest carelessly, endangering yourself and others around you. Uneducated investors fund bad sponsors. Bad sponsors give the entire industry a bad name." In working on Syndirater, we join Burke in this effort. Greater skills and knowledge on the part of passive investors--just like you, just like us--can only lead to a stronger industry, stronger economy, and better outcomes for all involved.