Specialist · Member since 2021 · 322 posts · 273 votes
Hey BP Fam!
Warren Buffet recently did an interview (seen here) in which he gave this interesting quote:
""Apartment buildings are another asset that Buffett wouldn’t mind owning at the right price.
“[If] you offer me 1% of all the apartment houses in the country and you want another $25 billion, I’ll write you a check. It’s very simple,” the legendary investor says.
Whether the economy is booming or in a recession, people need a place to live. And with real estate prices rising to unaffordable levels in many parts of the country, renting has become the only option for many people."
What is everyones thoughts? I tend to agree with the number of renters increasing which will drive up occupancy and rents.
Berkshire Hathaway Realty is pretty active realty brokerage and I am sure generates plenty of cash flow from brokering deals, so no matter how you slice it, Buffet is making money.
As for apartment investing and the greater economic conditions he mentioned in the quote, seems like solid reasoning, as he is well known for.
Rental Property Investor · Houston, TX · Member since 2019 · 184 posts · 147 votes
4y
@Colton Hahn could not agree more. Apartments are a recession proof business model if you buy right. When there is a recession, people lose their homes or cannot afford to buy one and apartment demand increases even more. I love commercial mtf because you can control the value of your property. The more money your property generates, the more it is worth. Plus all the tax benefits. There is no better investment in my opinion
Rental demand is a function of housing demand. Housing demand is something that should increase as we move forward, therefore Buffet is right.
Couldn't have said it better! Rising rates = less buyers. Less buyers = more renters. More renters = higher occupancy. Higher occupancy = higher demand and higher rents
@Colton Hahn could not agree more. Apartments are a recession proof business model if you buy right. When there is a recession, people lose their homes or cannot afford to buy one and apartment demand increases even more. I love commercial mtf because you can control the value of your property. The more money your property generates, the more it is worth. Plus all the tax benefits. There is no better investment in my opinion
Berkshire Hathaway Realty is pretty active realty brokerage and I am sure generates plenty of cash flow from brokering deals, so no matter how you slice it, Buffet is making money.
As for apartment investing and the greater economic conditions he mentioned in the quote, seems like solid reasoning, as he is well known for.
If Warren is putting money in something I think people should consider putting money in it too the guy isn't exactly known for losing money
It's sound and straightforward reasoning. Billionaires are usually diversified across many different asset classes so this isn't surprising at all. For example, Bill Gates is the largest private owner of farmland in the United States.
If a lot of millennials are being "boxed out" from owning homes then they will be forced to rent. Unless we have a revolution in home building I don't see that problem going away.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
"At the right price" is the key to Buffett's whole investment philosophy. Let's dig into that and look at his numbers!
According to NMHC, there are 21.9 million apartment units in the US. 1% of that is 219,000. He's offering $25 billion for those units, or $114,155 a door. That would definitely be an awesome price in the vast majority of markets.
Warren Buffet recently did an interview (seen here) in which he gave this interesting quote:
""Apartment buildings are another asset that Buffett wouldn’t mind owning at the right price.
“[If] you offer me 1% of all the apartment houses in the country and you want another $25 billion, I’ll write you a check. It’s very simple,” the legendary investor says.
Whether the economy is booming or in a recession, people need a place to live. And with real estate prices rising to unaffordable levels in many parts of the country, renting has become the only option for many people."
What is everyones thoughts? I tend to agree with the number of renters increasing which will drive up occupancy and rents.
Warren Buffett buys apartments And Donald Trump owns a tower. Have you seen Warren Buffett or Donald Trump hanging out on Bigger Pockets lately? Lol