LEARNING HOW TO INVEST FROM THE ORACLE OF OMAHA

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

Remember: Please share this article if it helped

What Can We Learn about Real Estate Investing from Warren Buffett?

Buffett has a ton of great quotes and explanations of how to manage money. Not just with the asset classes of business or stocks, but with any asset class including real estate. Buffett has even praised the value of real estate as an investment. Today I would like to glean some wisdom with you from a few of Buffett's more famous quotes.

"Rule #1: Never lose money. Rule #2: Don't forget rule #1"

The obvious way to apply this rule to real estate investing is that your first way to invest is to purchase buy and hold properties, for a long period of time, and each investment MUST cash flow using the rules I've outlined before. When each property you own is cash flow positive after ALL expenses you have no need to worry no matter what happens. You could be injured or even die and your family would be taken care of. You could lose your job and yet not have any concerns about your rental properties.

“Price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

Again, the application for real estate is obvious. When you purchase real estate you buy it at a reduced price. There are two easy ways to do so: 1. Purchase real estate when the market is down trending or in the basement because everyone else is selling and this is called a 'buyer's market' 2. Purchase real estate from people who are motivated to sell quickly. For many reasons a person can want to sell quickly and to help someone with this desire you can purchase a property at a discount.

"Even now, Charlie [Munger] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.”

Again, purchasing real estate for the long term is a way to take care of enormous amounts of risk. Don't take my word for it... take Buffett's.

Last Thoughts

While Buffett is rich for quotes and there are many others I could discuss in this post my intent was simply to point out that investing wisely and with a focus of lowering risk can be learned from many sources. My belief is that real estate delivers more bang for the average person's buck than stocks or business, but I also recognize that those with wisdom and experience in investing in ANY asset class should be well heeded and there are few better to learn from than Buffett.



Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html