What Would Warren Buffett Do? - Buy Single Family Homes

Warren Buffet CNBC's Squawk Box Interview w/ Becky QuickWarren Buffett, CEO of Berkshire Hathaway and famous American businessman, investor, and philanthropist, recently held an interview with Becky Quick, CNBC’s host of Squawk Box.

Buffett was interviewed live on February 27, 2012 on location at his latest acquisition, Omaha World Herald.

Anything Buffett says about investing and the economy, you should probably give merit to. This particular interview made headlines because of his comments on the single family housing market.

“If I knew where I was going to want to live the next 5 or 10 years, I would buy a home and I’d finance it with a 30 year mortgage.”

Warren Buffett’s Quote about Single Family Homes:

“I would say that single family homes are cheap now too. If I had a way of buying a couple hundred thousand single family homes, and I had a way of managing them–management is really the problem, because they’re one by one; they’re not like apartment houses–I would load up on them, and I would take mortgages out at very, very low rates. If anybody is thinking about buying a home… 5 years ago they couldn’t buy them fast enough because they thought they were going to go up, but now they don’t buy them because they think they’re going to go down. And interest rates are far lower– it’s a way in effect to short the dollar, because you can take a 30 year mortgage, and if it turns out your interest rate’s too high next week, you refinance lower, and if it turns out it’s too low, the other guy’s stuck with it for 30 years. So it’s a very attractive asset class now.”

Becky Quick responded with:

“If you are a young individual investor at home and you have your choice between buying your first home or investing in stocks, where would you tell someone is the better bet?”

Warren Buffett’s response:

“If I knew where I was going to want to live the next 5 or 10 years, I would buy a home and I’d finance it with a 30 year mortgage. It’s a terrific deal. If I, literally, if i was an investor that was the handy type, which I’m not, and I could buy a couple of them at distressed prices and find renters, and again take a 30 year mortgage, it’s a leveraged way of owning a very cheap asset now. I think that’s as attractive of an investment as you can make. I think equities are very attractive compared to anything else.”

Call Paul Drecksler at (828) 273-3031 or Scott Mehlman at (310) 430-6361 if you’re in the market for a home in Southern California. We specialize in Distressed Real Estate, Bank Owned / REO properties in the Greater Los Angeles Area.


Source: http://realestateinsidernews.com/nar-2/warren-buffett-says-he%E2%80%99d-buy-a-couple-hundred-thousand-homes/
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