Sacramento Real Estate Views

Warren Buffett and Sacramento Real Estate

An article I read today from the New York Times written by Warren Buffett gave wisdom that can be directly related to the mindset needed to be successful in the Sacramento real estate market or any investment scenario.  There is a lot of fear out there right now about not only real estate but the economy, personal finances and shadows moving in the night.

There is fear of fear itself.  If I remember the quote correctly, the only thing to fear is fear itself.

On this point, Mr. Buffet wrote;

“A simple rule dictates my buying: be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors.”

Warren Buffet

My guess from this statement is that it’s time to be greedy.

Fear is paralyzing.  It causes people to act or not act in very peculiar ways.  I’ve heard it said on occasion that fear is a motivator.  I would agree with that.  It negatively motivates.  Is that a good thing?  Will that get you across the street safely?  Maybe but you won’t be happy about it!

Mr. Buffett went on to say “..to be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nations many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

If Warren Buffett doesn’t know what he’s talking about, who does?  He runs neck and neck with Bill Gates as the richest man in the world.

Let me state that I’m no Warren Buffett but what I’m seeing in the Sacramento real estate market right now is opportunity.  I look at homes everyday that qualify as cash flowing rentals.  I’m getting many calls from investors who are looking for property, have cash and are ready to buy when I find the property that fits their investment profile.

If an investment is earning money, the definition of an asset, the cost of that asset becomes less important.  While the cost certainly figures into whether or not a rental will cash flow, as long as it POSITIVE cash flows net, what else matters?

I end this post with this last quote from Mr. Buffett which made me laugh as it was so poignant to his origins in Nebraska.

“What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”

Warren Buffett

The only thing that will end this crisis is the courage of each individual to act in accordance with their goals, intelligently, regardless of the exterior circumstances and conditions.  When things appear to be at there worst, successful people purchase.

In other words, if you wait to feel comfortable about your decision to purchase, waiting for someone else to tell you it’s ok, the opportunity will have passed.

If you have the means, the time to buy Sacramento real estate is now.

Real estate is a proven investment and the values in the Sacramento region homes has gotten affordable and profitable again yet all appears dark on the horizon or at best, uncertain.  Funny how the richest man in the world doesn’t see it that way.  Should anyone else?

While I don’t like this quote of John D. Rockefeller much, it applies here.  “The time to make money is when blood is running in the streets.”  It’s pretty bloody out there right now.  Call me if you’d like to take advantage of it.

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This entry was posted on Sunday, October 19th, 2008 at 5:34 am and is filed under Real Estate Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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