What Warren Buffett Can Teach Us About Real Estate Investing
Many of us in the investing world stop and listen to every word that Warren Buffett has to say about the stock market and business. While many of his ideas are sage advice on investing in general, many of them translate well into real estate. Our business is about picking good value properties, profit and loss, accounts receivable and payable and balancing our checkbooks.
Many successful investors are a big fan of Warren Buffett and his value investing style. The biggest suggestion from Warren Buffett is to try and purchase properties at a 25% discount to market value. Here are some more suggestions from Warren Buffett that I think apply to real estate.
1. Read everything you can and always continue learning. (This does not mean signing up for expensive courses.)
2. Find something you have a passion for and make it your career.
3. It takes a lifetime to build a reputation, but only five minutes to lose one.
4. Expert investors should not diversify. Put all your eggs in one basket and watch that basket.
In reading these points I can not help but think how relevant all of these are to investing at every level. Reading and learning are at the core of our business. The more you read, the more varied and deep your education will be. Donald Trump starts his day reading trade magazines, business journals and books. If you want to succeed, you should consider doing this yourself.
Investing in property is definitely a business that you need to bring passion into. If you are looking for a quick buck, you might as well leave now. The people that do well in this business are fully engaged, loving what they do and passionate about their success. You have to realize that it takes time to build a fortune investing in property. This is a not a get rich quick scheme.
Your reputation is something that you build every day in your interactions with people as you engage in business. Treating others fairly in an ethical manner is a recipe for long term success.
It has been said in real estate that you need to learn a niche and really focus in on that area to leverage your time and energy and know how. Trying to spread yourself too thin with too many properties spread out all over town may not be the best strategy. Studying a neighborhood and focusing in on that area can often bring you better results than driving all over town chasing deals and rent checks.