Real Estate Investing
Real Estate Investing in Dallas/Fort Worth is a booming industry. Dallas houses are not experiencing the same depreciating trends as some of the other major US markets. Buying rent houses in Dallas, and the surrounding DFW markets is a great investment strategy. Flipping houses in Texas is still profitable, but purchasing rental properties that produce residual income is still one of the most solid investments one can make.
Warren Buffett recently made some interesting comments on CNBC’s Squawk Box, specifically with regards to purchasing single family homes, and the strength of that investment. Buffett specifically stated “single-family homes are a bargain”. He also stated he would buy ”a couple hundred thousand” single family homes if it were practical to do so. You can watch the entire interview here.
Here is a direct quote from CNBC: ”Yeah, single-family homes— but if I had a way of buying a couple hundred thousand single-family homes and had a way of managing— the management is enormous— is really the problem because they’re one by one. They’re not like apartment houses. So— but I would load up on them and I would— I would take mortgages out at very, very low rates. But if anybody is thinking about buying a home— five years ago they couldn’t buy them fast enough because they thought they were going to go up, and now they don’t buy them because they think they’re going to go down. And interest are far lower. It’s a way, in effect, to short the dollar because you can— you can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for 30 years. So it’s a very attractive asset class now.
This next quote is one of the best lines people need to heed from the “billionaire next door”: Well, if I thought I was going to live— if I knew where I was going to want to live the next five or 10 years I would— I would buy a home and I’d finance it with a 30-year mortgage, and it’s a terrific deal. And if I— literally, if I was an investor that was a handy type, which I’m not, and I could buy a couple of them at distressed prices and find renters, I think that’s— and again take a 30-year mortgage, it’s a leveraged way of owning a very cheap asset now and I think that’s probably as an attractive an investment as you can make now. But I think equities are very attractive compared to anything else.
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