From one of those personality evaluations I did about a year ago it identified my highest priority as someone who loves to learn. So it should be no surprise that I also like to share what I learned with you; my loyal group.
Recently one of my long-distance connections, Doug Marshall, a wonderful mortgage broker in Oregon, wrote a blog on the 5 Lessons Warren Buffett Learned from Investing in Real Estate.
Better yet, they reflect my same attitudes.
And since real estate investing has been an important part of my financial growth, maybe you’d like to know what those lessons are from Mr. Buffett.
So here they are as I discovered from Doug:
1. Buy when things are on sale. Mr. Buffett (I’ll call him Warren in the future like I know him. Wouldn’t that be great?) Here is what he says, “I will tell you how to become wealthy: Be fearful when others are greedy. Be greedy when others are fearful.”
While there are only two properties he purchased, it was while they were in foreclosure. When he did most investors were out of the market, fearful that real estate wasn’t ever going to turn around. Mr. Buffett knew differently and acted upon it.
2. You don’t have to be a real estate expert to achieve satisfactory investment returns. But you do need to turn over management of the property to someone who is well qualified to manage the property for you.
My experience in property management came from both education and the school of hard knocks. It was from all the mistakes I made that taught me what worked, and what didn’t. Over 50 units and 18 years of experience I’ve only had two evictions that went to court. One was a tenant that came with a building when we purchased it. And the other was a tenant that went crazy from something after two years of being just fine.
3. You don’t need to do a sophisticated investment analysis to determine whether to purchase a property. Many times a common-sense look at the property will do. Ask yourself, “What is holding this property back from operating well?” If you can answer this question and you’re confident that you can correct the problem, then buy the property.
This is what made us wealthy. We purchased properties that had deferred maintenance and were mismanaged and turned them around.
Since I don’t want to go on too long, and keep your reading time to under 2 minutes, you will see the last two lessons in the next article.
To your prosperity,