investment expo

What Warren Buffett Said About the 30-Year Loan, and Why I Agree

I think that we would all agree that if Warren Buffett gives financial advice, it is going to be worth listening to. He has been one of the richest men in the world for many years now, and his unconventional financial wisdom means that he is widely considered to be the most successful investor of the 20th century. So, without doubt, it feels great to have one of my ideas validated by Warren Buffett himself. Watch this to know which one. 

Warren Buffett and the 30-year loan.

In a very recent article by Maurie Backman titled Warren Buffett’s 5 Best Pieces of Money Advice, Buffett said that he is a big fan of financing a home with a 30-year mortgage, especially when rates are low. 
“When you take out a long-term loan, you buy yourself flexibility by not locking yourself into the higher payments that come with a shorter-term loan.”
According to him, with interest rates as low as 2% it is a no brainer that people should finance their real estate purchase using this instrument. This low rate spread out over a 30-year period makes it an incredibly attractive option. And guess what? I agree!
I’ve been advising my clients and viewers on the same lines.
I had engaged in some personal correspondence with Warren Buffett sometime in 2012. This was after the recession, and at the time he had written to me that he was interested in buying 70,000 to 100,000 homes for Berkshire. He told me that he wanted to get a 30-year loan to finance each of the homes he bought. In his view, with only a 20% down-payment requirement, it really didn’t get any better! No wonder the 30-year loan recommendation happens to be one of his top five financial tips.

Why I recommend 

the 30-year loan.

I have myself relied on the 30-year loan to invest in real estate over the years, and it has worked really well for me. I advise my clients to do the same because I believe it is a gift that no American should refuse – and it has worked really well for them as well. Believe me, foreigners can hardly believe that such a long term, fixed rate loan is actually available to Americans!
The reasons why I – and world famous experts like Buffett – recommend this loan are easy to understand. With low interest rates and fixed repayment amounts spread out over 30 years, this loan becomes easier and easier to repay. Inflation and rising cost of living do not impact the amount you pay each month; it remains the same. So at the end of say 10 or 15 years, the amount you’re paying each month seems to be little more than a fancy dinner somewhere!
Now there is a catch of course. Warren Buffett wanted to finance thousands of homes with the 30-year loan, but there is a limit to how many loans you can take out. Each individual can take out no more than 10 of these loans. A married couple can get 20 loans between them. So how do you buy more homes as I advise you to do? There is a way. This is also one of the topics we will talk about at our next online Property Expo, and you are most welcome to attend.

Where NOT To Buy Real Estate & How to Safeguard Your Investments

At ICG Real Estate, we are all about helping you build a secure financial future with savvy real estate investments that are going to fetch you the best possible returns. We crunch the numbers, look at growth trajectories and weed out areas that don’t make sense. We then facilitate your investment by giving you access to our network of developers, property managers, financers and so on.
This helps you and also helps strengthen our networks. So really, it’s a win-win for all concerned. However, it is important to invest based on sound market insight and not get carried away by what is trendy or just doing what everyone and their cousin are doing right now.

Territories that just don’t make sense right now.

There was a time when territories like Boise (Idaho), Baton Rouge (Louisiana) or Salt Lake City (Utah) made a lot of sense for real estate investors. At the time this made sense for people who wanted to buy, bide their time and reap good profits ten, fifteen or twenty years later.
Right now, however, these territories aren’t a good idea at all. There are no properties to buy and not even any waiting lists you can get on. Each time someone puts up properties to sell, buyers seem to be jostling to buy. Common sense tells us that we don’t buy in a sellers’ market. 
So where do you buy?

The ICG Advantage.

Now your financial aims may be varied – you may want to finance college for your kids or even grandkids. You may want to ensure a comfortable, even luxurious retired life. Or you may just want to have a financial fallback of sorts. Whatever your aims, right now, investing in single family homes in carefully chosen real estate markets seems to be your best bet. Not only does ICG Real Estate examine future growth prospects, but we also examine numbers that make sense in terms of rent – a passive income source for our investors.
Like I said, it’s a win-win for our investors – who pay nothing extra – and for us because it helps us strengthen our networks. You can contact us to set up an investment meeting, or ask us to send you exclusive property listings. You can also attend our quarterly Expo events where we talk about real estate investments and have a lot of fun! We even have teams present from the markets that are good to invest in to share their insights with you.  Reach out to us if you have a question or if you’re ready to take the next step to safeguard your financial future – we can tell you how!