Why Warren Buffett Isn’t Investing in Masses of Single Family Rentals
There are two main reasons…
1. Property Management
Warren recognizes that while home prices and the current bargains on the market are appetizing, taking on an empire of single family properties can also be a property management nightmare. This means buy and hold investors either need to give up some of their cash flow and profits to pay a property manager or face the frustration, liability and endless hours of doing it themselves.
2. Financing
While mortgage interest rates are certainly incredibly low and probably won’t remain this tasty for too long getting a long term home loan, especially on an investment property isn’t easy. This is not only a challenge for real estate investors buying right now but in case any homes need to be liquidated in the near future.
There is one more thing Buffett has failed to highlight in his recent interview spree. He comments that as the economy improves more relationships are formed and there are more marriages, resulting in new home purchases. However, times have changed from the last few cycles and divorce and separations are much more accepted today, meaning that more people will be able to afford to split too. This will also bring a demand in housing though much of it may be smaller residences rather than ‘McMansions’.
We are in a peak market for flipping houses, with prices rising and more investors getting in. It is time to build a fat pipeline of deals that can be quickly flipped using transactional funding. Just make sure that you stash away a good portion of your profits for a rainy day.
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"I want thank you for the excellent service I received from Best Transaction Funding.The quick response I received from your company from the beginning of the transaction and to the end was unbelievable. I also want to give a special compliment to you as well. You went to great lengths to keep me informed and gave my title company all the information they needed to complete a successful closing. I cannot express how thankful I am. Such service builds great working relationships. I will definitely recommend Best Transaction Funding to all my fellow investors. Thank You."
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"....a few months back, I happened upon a video, on your site, regarding the use of transactional funding with Hud properties; and I found myself replaying the video over and over because of the value that I saw in the message...it actually explained the process, step-by-step on how to submit a Hud deal by using transactional funding. Once I completed the video, my initial response was to take immediate action by duplicating what I had learned from the video into real time. So I did some research on properties in a market where I knew I had buyers; and put together a hud deal. I then located a realtor able and willing to submit my bid online and within a couple of days, to my surprise, received a call telling me that I had won – my very 1st Hud bid."
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- Ericka B., Real Estate Investor, CA
