A relatively easy read, with carefully crafted examples to drive home its main points, this book is perhaps one of a handful of books that I would recommend to anyone looking to invest in commercial real estate, or simply to gain a little insight into and appreciation of the topic.



The book reveals three critical points associated with real estate investment. The first is that city hall determines the ultimate value of any real estate property (here I have glossed over some inconvenient math, which is adequately explained in the text). Cummings sums it up by saying that the use (of a property) determines its value, but he also is careful to mention that zoning determines use and that city hall ultimately makes the decisions about zoning. Therefore, it behooves the aspiring real estate investor to get to know the mad hatters (in my experience, this is the only term that quite aptly applies) that run city hall. Since they determine the zoning in a neighborhood, and the zoning governs use, and as Cummings also correctly points out, the use determines the amount of net operating income that can be generated, in the end, city hall dictates the value of any commercial real estate investment. As such, real estate investment is a very political activity, moreso than other types of investment.



The second critical point is the identification of a comfort zone in which to make real estate investments. Comfort zones have two important dimensions. The first and most important dimension is the property location, and the second dimension is property type. Ultimately, the successful commercial real estate investors tend to be specialists who focus on a particular property type within a carefully selected region or locality.



The third critical point is the importance of due diligence in commercial real estate investment. One can think of it as doing one's homework on a prospective property purchase or as doing extensive detective work on the investment (kicking the tires, looking under the hood, whatnot). As Cummings puts it, it is better to think of this critical point like this: Imagine a two-sided coin, with one side being How Much Do You Know About The Property Before You Purchase It, and the other side being How Much Do You Want To Pay After You Purchase The Property? If there are any problems afoot, the less you know before the purchase the more you will pay after the purchase, and (not necessarily) vice versa (like most investors, if you uncover extensive problems during due diligence, you will likely pass on the purchase).



I like to think of these critical points as the Three Golden Rules of Real Estate Investing. These rules are there to keep you out of trouble. Along with a few other useful hints, the book makes for a fast and excellent on the topic of commercial real estate investment. This book, combined with any of the books written by Frank Gallinelli, will put the aspiring real estate investor on firm footing for a successful career in commercial real estate investment.