3 Things Warren Buffett Taught Me About Real Estate
Q: As a real estate investor, why do you go all the way to Omaha, Nebraska every year to attend Berkshire Hathaway’s shareholder meeting? Ken, New York City, NY
A: Well, that’s a great question, Ken. I am a Berkshire Hathaway shareholder and huge admirer of both Warren Buffet and his business partner Charlie Munger, who are 2 of the greatest business minds that have walked the planet earth. I’ve been going to Berkshire Hathaway’s Annual Shareholder meeting in Omaha for many years. Although Warren Buffett is primarily known as a stock market investor, Berkshire owns a real estate brokerage and Charlie Munger was himself a successful property developer.
I sincerely believe that you get smarter and wiser by studying and emulating successful people, so to that end, I’m going to share 3 things that Warren Buffett has taught me about real estate:
1. Warren Buffett has said to “Never ask a barber if you need a haircut”. In other words, people who are paid to fix problems will always find them which is why I’d never hire a home inspector to do renovation work on one of my properties.
2. Warren Buffett has said that “The most important thing to do if you find yourself in a hole is to stop digging?” Sometimes, you have to just cut your losses. I’ve unfortunately found myself in that situation before as a real estate investor when I was losing money on property I owned. Coming to terms with that situation was painful but I benefitted in the long run and had I not recognized that bad investments usually don’t get better over time, I would have lost even more money.
3. Warren Buffett has said that “no one ever got rich paying too much for something”. There’s a saying in real estate that you make your money when you buy, so it’s vital that you never overpay for property.
Thanks again for your question Ken, good luck!
For more real estate tips and information, visit my blog at geraldlucas.com.
I’m Gerald Lucas and I’ll see you again soon.