This article is part two of the lessons Warren Buffett learned from his two real estate investments. To see part one, go >>HERE<<.
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.
The following are the last two of the five lessons:
4. Investing over the long term will eventually solve most problems. Warren (like I know him personally; I wish) still owns the two properties he purchased out of foreclosure: One he bought in 1986 and the other he bought in 1993. As he likes to say, “Our favorite holding period is forever.”
My wife and I may have kept some properties beyond the tax advantage time when we should/could have sold them, but what the heck. They cash-flow beautifully, the tenants cause us no problems, and we avoided a lot of stress involved in the IRC Sec.1031 tax-free exchange.
5. He didn’t concern himself about their daily valuations. He understood that he bought the properties at bargain prices and that over time they would make good investments. “Games are won by players who focus on the playing field,” he quipped, “not by those whose eyes are glued to the scoreboard.”
My wife and I kept our eyes on the long term. We made improvements that might not benefit us for one or two years with our return from the increased rent. A new roof was for us, not for resale. Taking care of the deferred maintenance was for our tenant’s long term, not just our short term. All of this paid off for us handsomely.
If you want to know more, or have some questions about your own real estate, feel free to send an email.
To Your Prosperity,
Rennie
