Warren Buffet on the US housing market

Thank you for sharing the post, the comments below article also made for good reading and insight into how some of the American people feel.

there was an article in the USA today or better known as Useless Today::

Anyway front page of 2 investors talking about the rental in Chicago they bought and how its better than bank rates etc.

Now with the Gov.. and Buffet  look out…..

Here is my prediction… better popular markets will start to see bidding wars… Its already happening in Atlanta, Although How low could those prices go Cricky ( or how ever  you spell it)

Pheniox central Cal  probably the better parts of Florida ( sorry Cheeves:) I am thinking major world class towns and real estate for Florida…

For any of my US buddies that will listen I started my TWH buy and Hold program 18 months ago,, and so for once in my life I was a head of the Oracle from Omaha.. ( just wish I had his capital to impliment)

Now is the time to start finding under the radar markets that are not over heated but still have good metrix, and I am not talking about 5 to 20k houses. I mean markets that have potential to grow in value, anyone here in the US can buy lemons and squeeze them for drips of cash flow ,, the real returns are buying in markets that rebound or have a chance too….

My prediction the 900 dollar cash flow rental in Atlanta will cost 25% or more wholesale this time next year if not double.
Too much world pressure and the market there got unrealistically low….

I am buying lots like a mad dog right now.. closing everything I can get within my price point… I will be building come this time next year if not sooner…

Come on Aussies keep your dollars flowing, with the exchange and the rise in US values which are certain to come, and the potential of the lowering of the Aussie dollar to market norms you folks stand to cash in in a huge way…..And lord knows we need and love the cash investment and the money spent when you travel here…

OK off to ATlanta tomorrow myself… I guess to glimps at what was and probably what can never be… Real estate bought in the last 6 months price wise in ATL.
<br /:)” title=”>:)” class=”bbcode_smiley” />   JLH

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Jay:  What are your "better markets in Florida"?  I'm curious since you don't invest or lend here.  I'm assuming you mean major metro markets?  Miami?  Tampa?  I really like Tampa's multi-family market, not single family market as much as I do Fort Myers or Cape Coral single family market.  I know your thoughts on Lehigh.  I bought a house in SW Lehigh almost a year ago for $48,000.  Minor rehab needed, about 3k worth.  Current value or what I could get retail right now is $70k…and that's a cash buyer price.  I think $100k values in SW Lehigh by this time next year.  Financing buyers are already in the 80's.

I just bought 5 lots in a row in Florida.  Cheap but in areas where home prices are skyrocketing.  Thinking of 2014 for selling or building.  Maybe even early 2013 so homes can be ready come season time.  That would exceed expectations.

Those looking to diversify into something else, multi family is going crazy right now and will continue to do so.  Get yourself a stable 9% Cap and sit on it for a bit.  Add value in a year or 2 by updating kitchens/baths….Investors are so caught up in Cap Rates in the teens.  To me, this is a waste of time because those almost always exist in ghettos.  In multi family commercial, you will get outbid, no doubt if you base your bid on a higher cap rate in a marketable area..  The market is trading at 8-10% Caps in good markets right now for C-Class.  Higher Cap means higher risk…Lower Cap means lower risk.  Just historic.  This is why the MF market is trading in different Cap Rates when buying Class A, B, or C.  New Construction (A-Class) trades at a MUCH lower Cap Rate then C-Class.  Get a good agent and buy a 6-9 unit building.  They are flying right now and rental rates expected to rise.

FYI, when shopping commercial / multi family, if you calculate anything less then 40% of your gross income as expenses, you likely don't have all the info.  ..Important to get it and that is typically done in due diligence.

"Here is my prediction… better popular markets will start to see bidding wars… Its already happening in Atlanta, Although How low could those prices go Cricky ( or how ever you spell it)"

Crickey…. Jay I think you may be right.

Good deals are far and few between – lots of competition,   I also suspect that owner/occupiers are jumping into this market making it tighter to secure a property at the right price. At least we have the Aus $ heading up  up up almost –  $1.08. Time to bring the money down.

Though there will be a cut off point when the yields are no longer attractive and overseas investors will bail out??

Also, OK you buy land and hold, what about in the interim…. no rental income, that is a problem for me.

Cheers WI

Then you know little about Warren Buffet and are simply parroting what the media says.

Buffet doesn’t give a hoot about property other than it’s in his personal interests to talk up the US economy. Much of his commentary is not taken seriously by mainstream economic commentators. Buffet is more of a ‘story’ these days as opposed to some oracle. His investment company (Berkshire) accesses investment deals and has them structured favourably in ways only you and I could dream of.

If you read his commentary and watch his interviews they’re all about promoting and talking up his many investments. His comments are subjective and considerably parochial and shouldn’t be taken seriously by the average small time investor. His investment philosophy and strategies in the early days of his career on the other hand are well worth getting one’s head around.

The Freckle

Good read but seriously you know how many USA investment teams like myself will have this posted on their website. Media , marketing and Warren Buffet . Some how they are all tied together…

talk soon hope all is well remind when you are going to be in NY again

Wow. That's alot. Can you break it down a bit?

Brilliant, knowledgable post, probably worth it’s weight in gold