Warren Buffett avoids direct property ownership because it's essentially running a second business. The hosts explain why passive real estate investing through professional teams beats being a landlord, and discuss Buffett's comments on real estate's value during inflation.
Here's Warren Buffett saying, hey, I don't want to be a landlord. Like being a real estate investor or owning real estate is a business. It is another job. I want to invest in real estate. I simply want to invest with the team that is doing all the work, and I get to get some of the returns. Probably for the last year and a half or so, as interest rates started to rise, as inflation was going up, people were getting fearful. And you know the Warren Buffett quote, be greedy when other. Others are fearful and fearful when others are greedy. There's these articles that, like, we printed out, because I was looking and I was like, hey, what's Warren Buffett doing right now? And I just wanted to study it before we did this, this podcast. And he was talking about. He's. He's diversified also, of course, between companies and real estate and the real estate. What his big thing is is I love real estate, but I don't want to own the real estate. I want to be the passive investor. For those of you who are getting into real estate and thinking that you're going to be a passive investor by owning it yourself, it's not the case. And usually people find out and then like, crud now, and they want to get rid of it after they've lost a lot of time and money. And that's essentially what he warns people about, real estate. He wants to invest in a company that does real estate and provide passive returns to him.
He says, and this is like having your cake and eat it, too. Yeah. You know, he said investing in real estate is a different story. Passive real estate investments allow investors to reap the rewards of this profitable asset class without taking on management responsibilities.
Yes.
I mean, it's just owning real estate. You know, of course, everyone watches the flip this house or whatever, you know, and they're like, oh, that looks fun, you know, right. Until they get into it, and then they. And then they lose their hat because it's a business. It's not. It's not a hobby, it's a business. And there's. There's so much. So many things that are involved with it. Whereas passive investing is. Somebody else is still doing all of that, but you're not. Yeah, you're investing in. Essentially you're investing in them. Yeah, but I know that we keep saying. It's funny because I think our answer has changed now. The. Would you have done something differently when you started? You know, now it's because for me, I was. I always said, oh, I wish we would have gotten into apartments first. Yeah, no, I not my answer not is I wish we would have gotten into passive investing first.
Right, yeah.
You know, not into apartments. I mean, yes, that, that was, that's cool and all, but that's even more work than single family house. But letting somebody else get into apartments and we're just investing in them.
Yes, yes, agreed. Another thing that is in this article as well. This is a Yahoo Finance, by the way. Many investors have turned to the private markets for passive real estate investments and have averaged even greater returns. And Buffett's approach to real estate investments is focused on the intrinsic value of real estate. Unlike many other options, real estate is a tangible asset with lower susceptibility to market volatility. In general, its value tends to increase over time. As the value of money decreases during an economic slowdown, there's a high likelihood of an increase in real estate value. And then in quotes, they're the businesses that you buy once and then you don't have to keep making capital investments subsequently. Buffett said in a recent shareholders holders meeting. So you do not face the problem of continuous reinvestment involving greater and greater dollars because of inflation. That's one reason real estate is generally good during inflation. So I thought that was really, really good as well. I always like looking to people. I mean, I have a picture of Warren Buffett in the office with his. You have an autograph I haven't signed off.
Yes, his actual signature.
Yes, yes.
Which is huge.
Yeah. So.
Well, it's actually small, but it's huge.
Oh, my gosh.
Sorry. I went there.
But yes, to listen to his view on real estate. It goes back to what we talk about all the time, about active investing versus PASS and how passionate we are about talking to be to people about the difference. Because so many people understand the power of wealth building through real estate, and they think there's only one path to get there, and they think they have to do it in order to get in the game. And that's just not accurate. And so here's Warren Buffett saying, hey, I don't want to be a landlord. Like being a real estate investor or owning real estate is a business. It is another job. I want to invest in real estate. I simply want to invest with the team that is doing all the work and I get to get what some of the returns. So that is exactly what we offer here at Freedom Family. It's what we're super excited about. Because, you know, I get excited. We, we grew up, we say poor but rich. Is that what we say poor in finances, rich in love or something.
Well, there's that too. I say, I wasn't poor, but I didn't have any money.
Yeah, there you go. Yeah. So we're just so passionate about helping people like that. We didn't grow up knowing about money. And as we learned about money and as we learned about real estate and as we grew these companies, we're like, let's help all the other people who don't have the opportunity that we did to really just go all in and to build this and to have an incredible team behind them. And let's help those people get good returns backed by a company and real estate that they can feel safe with, they can feel confident with. Right. Because we always say there's not one private money lender that is ever not made exactly what they were owed back in capital, plus all the interest that we owed for the time that we had their money exactly as promised. We don't negotiate anything. And the private money lenders are the first people we had the opportunity to work with to be able to say that. And that is so, so important because we're putting our investors interest before ours. Why? Because you're trusting us as the professionals. Right. And that's really, really important. And you just don't see that.
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