The Real Estate Game is a comprehensive guide to successful real estate investment from probably the most masters in the field. Drawing upon four decades of experience developing, owning, and managing properties and on almost thirty years of teaching at the Harvard Business School, William J. Poorvu offers an insider’s perspective on how to make smart decisions about real estate.
The real estate “game” is played by people, and it’s the stories of real people that make Poorvu’s introduction to the industry colorful and interesting. You’re going to meet players ranging from real estate moguls to small-scale developers to individual investors in exotic investment instruments. Their stories evolve all through the book and illustrate how these people—with all their complicated needs, talents, and motives—fit into the larger process and context.
In clear and nontechnical language, Poorvu explains how variables—players, properties, capital markets, and the external environment—come together to influence the shape and outcome of a real estate deal. He explains the time period for different kinds of real estate investments and walks the reader through the key “periods of play” in the real estate game: concept, commitment, development, operation, reward, and reinvestment.
The Real Estate Game introduces a simple but powerful “back-of-the-envelope” technique for analyzing the financial implications of a potential deal. The usage of this tool and others, Poorvu shows readers how to use direct investments, syndicates, and REITs to get into the real estate game across a broad range of property types: residential, office, hotel, industrial, and retail.
Offering unique insight into the ways that developers and investors can create value, The Real Estate Game is both a perfect introduction for the novice and an invaluable overview for the experienced professional.
Real estate is as much about people as it is about property, and, after location, success in real estate depends upon understanding the motives of those who play the game, because many critical decisions revolve around what real estate people think, how they act and why. The Real Estate Game, by William J. Poorvu and Jeffrey L. Cruikshank, is a clear, comprehensive overview illustrated with real-life experiences about individual investors, small developers, and moguls. Poorvu has developed and managed real estate and taught real estate investing at the Harvard Business School for over 35 years. This book is drawn from his course, and is designed to help investors make the right decisions derived from the right assumptions and to provide an insider’s perspective on how to spot risks and develop strategies that provide protection and adequate investment returns.
The book uses the analogy of a game to illustrate one of the intricate and unpredictable interactions in real estate deals, and it lays out the rules of the game, including identification of the key players and periods of play: concept, commitment, development, operation, reward, and reinvestment. Readers are taught to be “value investors,” ready to shop for at the right price at the right time, because the most efficient opportunities come from buying at a discount-to-replacement cost. The value investor will have to be prepared to sell at the right juncture, and will have to not be compelled to be in the game when conditions make the game not worth playing.
The case studies that run through the book show how to evaluate, develop, and operate a wide variety of real estate investments from the points of view of all involved in the process. There’s an extensive appendix covering the different property types, and the authors’ “back-of-the-envelope” method for analyzing the financial implications of a potential deal is probably worth the book’s weight in gold. –Scott Harrison