How I think about LA real estate

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A contact just sent me this  link to an excerpt from Warren Buffett’s most recent Berkshire Hathaway shareholder letter.

Buffett’s approach is pretty much exactly how I think about multifamily real estate in improving parts of LA:

  • Pay a reasonable price, such that the yield in year 1 is acceptable
  • Don’t put yourself in a position where you might be a forced seller (so, don’t over-lever)
  • Manage for yield
  • Ignore swings in market prices, except to buy more when prices get low
  • Never sell

If you just do this, my guess is that you’ll end up very happy about your investment(s).

Oh, and if you are interested in investing, you should 100%, absolutely, no question read Buffett’s collected shareholder letters, which are available as a collection on Kindle.

(Hat tip to EZ for the link!)

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