Buffett’s Berkshire Hathaway private company bought HomeServices of America, Inc. in 2000, while this company was part of an electric company. HomeServices of America Inc. is now the second-largest residential brokerage owner in the United States. HomeServices of America has 328,355 sides and a transaction volume of 125.4. A sale side is defined as being a stock, bond, and foreign exchange market. Sell-side and buy-side are interconnected. HomeServices’ side volume increased to 80,000 in 2017, a 34% jump from 2016. Home Services has recently been analyzed as being on track to becoming 3% of the countries’ home-brokerage in 2018, Buffett wrote in his annual letter to Berkshire shareholders, saying there is 97% to go.
Buffett’s strategy for investing in stocks can be used in the field with real estate investments as well. “Rule Number 1 is never lose money. Rule Number 2 is never forget Rule Number 1.” Rule Number 2 is don’t lose money. Buffett may be into stock but he is also into buying businesses.
Buffet’s team does extensive research on stocks, the businesses they belong to, and how that stock might be profitable if bought. Lesson 3 is to buy businesses because real estate is an investment. Lesson 4 means never invest in a business you do not understand. Buffett invests in blue-chip companies, not hot new biotech companies. Lesson 5 refers to the fact that “it’s all about the income,” as Buffett maintains $2 billion a year of income. Some stocks do pay a dividend income but a buy-and-hold investment with a regular payment of rental income is a way to structure holdings a certain way. Buffett’s principals have been proven to work, and he has earned the nickname “The Oracle of Omaha,” because his strategies apply to turnkey real estate investing too.