Don’t let the title fool you. Yes, in The Frugal Real Estate Investor, author Aki Suzuki certainly will tell you everything you need to know about entering and thriving in the world of real estate rental properties, everything short of handing you an actual property and negotiating a deal for you.
But this 200-page guide serves a much wider purpose, whether real estate investing ultimately is your thing or not. It is also a primer in managing your personal finances, achieving financial freedom and accumulating within your means a reasonable amount of capital to be in a position to make such investments in real estate or any other field.
Suzuki says upfront that his concepts are not a get-rich-quick scheme but rather sensible, deliberate strategies — real philosophies and actual behaviors — that have worked for him over time and that he has chosen to share with readers. He urges his audience to stay “patient, focused and frugal.”
He wants his readers to be in the right state of mind and understand what lies ahead. “Starting something new like investing in real estate for the first time can be extremely scary,” he writes. “Looking back, I can say that buying my first rental property was certainly one of the most intimidating experiences with many unknowns. I was very interested in pulling the trigger but could not get myself to commit for several years.”
As readers will see, there’s much more to the process than merely “location, location, location.” Suzuki organizes the book into three parts: becoming financially fit, ways to invest and understanding the differences, and hands-on tips for property acquisition.
In Part One, Suzuki offers five fundamentals for personal finances and discusses them in great detail: eradicate your debt, do not carry a balance, build your emergency fund, prioritize retirement and don’t quit your day job.
In Part Two, he meticulously outlines the benefits and pitfalls of real estate investing; everything from understanding cash flow to being prepared for those occasional bad tenants. He also provides a crash course in real estate math.
In Part Three, Suzuki lays out a five-point plan on how to approach acquiring properties: find your market niche, build your local team, create a pro forma, acquire property and set up the books.
The book is filled with formulas and equations, but Suzuki writes in a clear, concise, easily digestible manner so that no technical or mathematical background is necessary. He emphasizes that the content and strategies within have worked for him and he offers them up as ideas to consider, not necessarily the only sound approach to live or die by. Readers and potential future investors must find their own comfort levels.
Many of the concepts within might seem obvious or unglamorous. However, it is Suzuki’s hope that by taking the frugal, “no drama” path, readers will feel more confident and not second-guess their common sensibilities. This book is about mental and financial preparedness, and frugal conditioning to ensure your long-term success.
When looking at the many investors and their past business practices, he refers to a quote from Warren Buffett who said, “You only learn who has been swimming naked when the tide goes out.” Suzuki expresses his intent in writing this book was to help others remember to “swim with their pants on.”
