How to build your real estate portfolio the right way
In his lecture, Buffett also expressed his belief that “you really don’t need leverage in this world.”
However, if you’re drawn to the real estate market, some amount of leverage is often essential for most Americans, particularly those looking to buy a home. But ownership is far from your only option when it comes to investing in real estate.
Invest in residential real estate
Luckily, there are now several ways to tap into real estate without leveraging assets or taking on tons of debt.
For example, Cityfunds, for instance, provides direct access to diversified portfolios of owner-occupied homes in the nation’s top cities such as Austin, Dallas, Miami, Tampa, Denver, Phoenix, and Nashville.
Cityfunds is a two-sided opportunity for the homeowner and the investor: Homeowners have a new way to cash out equity, selling a fraction of their home equity to Cityfunds for cash without any added debt or monthly payments. In exchange for the cash, Cityfunds secures an interest in the home's future value, and sells shares in that interest to investors like you.
As the home value appreciates, so does the Cityfunds investment on both sides of the coin. So you can invest in the booming housing market of a city you love for as little as $500.
Access commercial real estate
In September, the U.S. central bank started moving aggressively in this new direction and cut interest rates by 50 basis points (bps). Rates were cut by a further 0.025% in November.
Commercial real estate typically appreciates in value when interest rates drop because buyers can afford to pay more for assets at lower borrowing costs.
These days, you don't need Trump-level debt or Buffett-level wealth to get involved in the $22.5 trillion commercial real estate market.
First National Realty Partners (FNRP) allows accredited investors to invest in institutional-quality commercial real estate.
FNRP’s team makes investing in commercial real estate convenient and simple by offering white-glove service to investors. They act as the deal leader, providing expertise and doing the legwork, while investors can use their secure platform to explore available deals, engage with experts and easily make an allocation.
FNRP has developed relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods, and provides insights into the best properties both on and off-market while investors can passively collect distribution income.
Investing like Buffett
Given Buffett really isn’t a fan of taking on debt, perhaps it’s no surprise he’s made most of his money by investing in companies at cheap prices.
He once explained in a letter to his partners, “This is the cornerstone of our investment philosophy: Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”
While it’s hard to find anything inherently flawed with that logic, price isn’t everything. A low price tag might very well be indicative of a low quality investment.
If you want the inside scoop on which investments to make, consider signing up with Moby you’ll get access to the best investing research so that you can make a sound investment choice.
Moby’s insights are broken down into simple, easy-to-understand formats. They’re written by a team of former hedge fund analysts and financial experts who spend hundreds of hours weekly sifting through the latest financial news and data.
And the numbers don’t lie: Moby's picks have beaten the S&P 500’s returns by almost 12%, on average.
If you prefer a collaborative approach, Public offers a community-driven platform for investment insights.
Public’s social investing features let you share ideas with their community of investors, and gain insights from your peers. The platform democratizes investing by offering a commission-free platform for trading stocks, ETFs, cryptocurrencies, treasuries, and even alternative assets.
What to do if you are overleveraged
Before Trump’s political career began, Buffett also found fault with Trump’s strategy when it came to debt and loans. At his 1991 lecture, he estimated Trump owed “perhaps, $3.5 billion now, and, if you had to pick a figure as to the value of the assets, it might be more like $2.5 billion.”
To avoid similar pitfalls, securing a loan that accurately reflects the asset’s true value is critical for anyone looking to manage debt responsibly.
For those already paying off debt, Credible is a loans marketplace for personal loans from the top lenders. It’s designed to make it easier to find the best debt solution for your needs, all in one place.
And with Americans predicting a 14.2% chance of missing a minimum debt payment over the next three months, debt consolidation might be a focused way to get back on track.
Credible works with trusted lending partners to find you the best options for easy debt consolidation. Based on the details you provide, you can get matched with a loan of up to $100,000 with interest rates starting at 6.94%.
Make a plan with a pro you can trust
Buffett’s overarching message about Trump from his lectures was that the president-elect’s business foundations were shaky right from the start.
And he was indeed right. According to a report from the Associated Press, Judge Arthur Engoron ruled earlier this year in Trump’s civil fraud trial that he engaged in a yearslong conspiracy to deceive banks and insurers about the size of his wealth, and the true value of his properties.
To avoid winding up in a similar situation, a financial advisor can help you craft a solid investing strategy that even Buffett might approve of.
Advisor.com is a free matching service that helps you find a financial advisor who can collaborate with you to carve out your financial goals, matching you with only the best options for you.
From their database of thousands, you get a pre-screened financial advisor you can trust, and can set up a no-obligation consultation to get started.
