During a recent CNBC interview, Warren Buffett confirmed what we’ve believed since 2008—single-family homes are a very attractive investment, if you’ve got the right property management system in place:
“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.”
“[I]f 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.”
To Buffett’s point, big-money investors are getting into the landlord business. Indeed, the Wall Street Journal reported this week that hedge funds, private-equity firms, pension funds and university endowments are dipping into the single-family foreclosure market.
For our part, we’ve been steadily buying foreclosures and other distressed properties in Grand Rapids since 2008, and are in contract to buy 3 more houses—1 duplex and 2 single-family homes—in the next few months.
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