Bob Greene: A man bought a cheap farm in New York. He figured out that, just based on normalized prices over the long run for corn and soi beans, this farm is going to give him a return of ten%. In other words, he's buying this at a ten cap rate. That sounds good if you consider that it was a 10 cap rate based on just whatever farming practices the f d i c was using. It wasn't compared to the actual farmers who cared about what they were doing. Nowright now, let's go over to real estate. The same thing happened to buffet in a in new york city,. They lent too much money on sub prime real estate
If you think that because real estate lets you leverage your investment, then the rate of return is much higher than investing in a business, and is, therefore a better place for beginner investors to put their money, think again. This is a commonly held idea that can be completely mistaken.
Phil and other expert investors – including Warren Buffett – have owned real estate. From subdivisions to large farms, apartments, commercial property, and single-family homes, if you assess it’s valuable for your investing goals, real estate could be a good option for you.
This week on InvestED, in an episode from The Vault, Danielle and Phil discuss whether or not it’s possible to make real estate a beneficial component of a high-performing financial portfolio.
Learn more about following the Rule #1 method of successful investing! Click here to download your copy of Phil’s Value Investing Cheat Sheet: https://bit.ly/3qBJfxU
Resources Discussed:
Topics Discussed:
- Rule #1 Investing
- Real Estate Investing
- Warren Buffet Berkshire Hathaway Letters
- Risk Management
- Skuttlebutt
- All-Weather Portfolio
For show notes and more information visit www.investedpodcast.com
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