Friday, March 26, 2010

MUST READ BOOK: The 1% Windfall by Rafi Mohammed

THE 1% WINDFALL by author Rafi Mohammed is by far the best book I have ever read on the subject of pricing products and services and how just a simple 1% increase in price can yield huge gains in operating profits.

While this book hardly mentions real estate at all, the importance of the author's analysis is so profound for rental property owners and investors it staggers the imagination.

Most real estate investors focus on "market" prices. What is the comp for that property? How much is a two-bedroom with 1 1/2 baths going for in a certain neighborhood?

As I have said many times, these are DUMB questions. Real estate investors can speak of "average" prices, but market prices are a whole other matter. This whole reasoning is beside the critical notion of intrinsic value, which is an investment valuation and not an accounting concept at all.

This book got my mind racing so fast on the subject of pricing in the area of real estate investment and development I may write an entire book on this subject.

In the meantime, this book by Rafi Mohammed is a great start. His analysis of pricing models is flawless and just plain brilliant. I can't recommend this book more highly to you. If you are a small business owner that sells a product or service you can put the ideas offered in this book to work immediately.

For the record, I do not know Mr. Mohammed or have any financial stake in the sales of his book. I'm recommending it to you because it is a must read book.

Robert J. Abalos, Esq.