Never stop buying. The only guys that I know that run into problems stop buying. Thoughts?
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It is difficult or really get my arms around this. In my mind there is a pretty big difference between owning less than 10 SFH (single family homes) and more than 10 SFH. At some point you have to decide if real estate is going to be just a small diversification play or if it is going to be a concentration for you. Buffett says that diversification is for amateurs and the only way to really make money is concentrating on a solid investment long term. Thoughts Dave?
How do you suggest to keep buying when banks are not wanting to loan money?
I disagree with buffet on the diversification piece. Yes it makes tons of sense if you own just Coca Cola. But what if all you own is Clayton homes or Encyclopedia Britannica. Buffet business that have not worked out that well for him. All I am saying is that we should consider —always buying fixing and selling. Not just buy 10 and stop. Maybe the hold period is 5 years, but you should always be looking for the opportunity to sell. Every tenant we get we should be talking to them about selling the house. Very few of us do this.
The concerning thing is why do you need to keep buying. In the stock market you do not have to keep buying. The issue with real estate it is too much of a job in my experience. It is active investing and a part time job. On some level it can be passive but that is hard to pinpoint. I think that the selling piece is important. If you go back to Wayne’s point of the fact that Real Estate is opportunistic. Always looking to buy and sell. That is more active management similar to what equity investors do. Very rarely do you hold a stock just because you have had it for a while. It all depends on your objective and how you want to spend your finite time here on earth.