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What would Warren Do

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If you came to Warren Buffet and asked him where to spend your investment capital he would actually encourage you to invest in Real Estate. In particular, single family homes.

Here’s what he said:

“If I had a way to buy a couple 100,000 single family homes and a way of managing them…I would load up on them”

Pretty powerful coming from one of the wealthiest minds on the planet. Here are some other key points he made

1. I would take advantage of the low rates and lock them in for 30 years: The beauty, he points out, is that because of the recent collapse the advantage is with the consumer on two fronts. A) If you were in a higher interest rate scenario (assuming you purchased before the climax of the market) you could refinance and get the lower rate. B) If you’re lucky to lock in a rate and the rates rise (assuming you don’t have an ARM) the bank is stuck with the opportunity loss making it a very attractive asset class

2. If I were a young investor and had the chance of buying your first home or investing in stock I would buy a house: It’s a leveraged way of owning a very cheap asset. What makes it even better is that people will literally help you pay it off (i.e. rent)

Posted by: sealeyteam on June 20, 2014
Posted in: Sealey Blog