Real Estate 2010: Profit Potential, Buy And Hold [Basil and Spice]

Jun. 7--BOOK REVIEW: 'Buy and Hold Forever': Not a Get Rich Quick Real Estate Book, It's Geared to Long-Term Investors

Los Angeles area real estate investor David Schumacher died in 2006, but his book Buy and Hold Forever: How to Build Wealth for the 21st Century (Schumacher Enterprises/2010, 379 pages, appendixes, index, $21.95) lives on in a new edition updated by Steve Dexter, one of his disciples.

Schumacher, who had a Ph.D. and was a real estate teacher and master appraiser for a large L.A. based appraisal firm, had an encyclopedic knowledge of the Southern California real estate market, which he displayed in the earlier edition of his book. His widow sought out Orange County real estate investor and author Steve Dexter to update the book in light of the mega changes in real estate investing. Dexter's comments are enclosed in boxes throughout the book.

I met Dexter at the 44th annual conference of the National Association of Real Estate Editors (NAREE) in Austin, TX earlier this month. A Laguna Beach, CA real estate investor, Dexter was a speaker and came loaded down with copies of his books, including the one I'm reviewing. He told me that the basics of Schumacher's real estate investing philosophy were so sound that only a little tweaking and updating was necessary on his (Dexter's) part.

Unlike the late-night infomercials telling people how to flip properties for a quick profit, David Schumacher discovered that the way to a lifetime of financial security is to buy smart and never sell, and he built a $20-million fortune using his own savvy advice. Forget about "flipping" properties. Say goodbye to late-night TV "no money down" scams.

Schumacher practiced what he preached, starting out in the 1960s with a six-unit apartment building in the --then-- rundown L.A. area beach community of Hermosa Beach. His purchase was sound, since it faced The Strand, with an unobstructed view of the Pacific Ocean. It's difficult to believe that Hermosa Beach was ever rundown: I lived in nearby Redondo Beach for a year in the 1970s and everything looked great to me.

The good doctor was following advice that he later published: Pick the properties with the most profit potential; Choose the locations that will be tomorrow's hottest neighborhoods; Negotiate lucrative real estate deals that can make you wealthy. Schumacher wisely realized that the conditions in Hermosa Beach could only improve and he was right. Acting on his instincts made him a multimillionaire and philanthropist. His real estate empire exceeded $20 million in value.

Buy and Hold Forever is packed with David Schumacher's real-life examples and axioms. He elaborates his techniques for buying with as little money down as possible and having the seller help with the financing. As Dexter points out, it's virtually impossible to buy properties for nothing down, especially in the wake of the meltdown, but minimal down payments and a wide variety of creative financing options are possible as lending institutions struggle to get out of the real estate business.?

MORE FROM DAVID M. KINCHEN

To see more of Basil and Spice, go to http://www.basilandspice.com/

Copyright (c) 2010, Basil and Spice

Distributed by McClatchy-Tribune Information Services.

For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.