Real Deal REInvestor Network

If you didn't get to listen to this show on CNBC, please do it today.  This information is fundamental to having the right mindset for investing in anything.

Here is the link:

http://www.cnbc.com/id/15840232/?video=1329393420&play=1

Enjoy and Profit.

Ed Young
HIS Real Estate Network

I found this interview with Warren Buffett to be enlightening even though it may seem overly simplistic.  However, when I think about his comments on each of the topics discussed, they support the way we are approaching our real estate investing business.
Summarized, the rules are:

1.  If its too good to be true, it probably is.  This is what happens in every "bubble market" and the residential and commercial real estate markets are no different.  We are now past the bubble bursting stage in real estate, where value investing can happen.

2.  Always look at what the other guy is making when he's trying to sell you something.  I view this as a warning to evaluate a deal from all sides and find what the motivating factor is in every deal.  If you can understand the other person's position, you will have a leg up in the negotiating and can come to the table with many more alternatives to make things work to your advantage.

3.  Stay away from leverage.   I loved his quote "If you're smart you don't need it [leverage], if you're dumb, you have no business using it."  While commercial real estate uses leverage, the important thing is the cash flow.  If the cash flow supports the note you are using to leverage the deal, you are using leverage in the proper way and it is no longer speculative.  In our deals, we raise capital by partnering with other investors, thereby minimizing the leverage.  We also aim to return investor capital as quickly as possible.