The Investor’s Edge University: Real Estate Investing News and Notes #2.

Hello Everyone!  Check out the 2nd Installment of ‘Real Estate Investing News and Notes’ from The Investor’s Edge University.
 
Here is the introduction from an AOL Real Estate article that gave us a look at 4 ways to make money in real estate.  
 
Most people purchase real estate in hopes of earning wealth from their purchase, just as they would with any other investment asset. However, real estate is unique in that it has four distinct components of investment return. Essentially, here are the four ways you can make money as a result of real estate ownership:
 
• Appreciation in value.
• Cash flows.
• Income tax benefits.
• Mortgage principal pay down.
 
It’s important to note that just because there are several components of returns, that does not mean you will earn money on real estate investments. Many people lose money due to insufficient research and analysis, as well as through unmitigated risk issues. Do your homework before investing in real estate.
 
Here is an interesting look at how investors are pooling their money online to buy real estate from NPR.  
 
The crowdfunding trend — where people donate money through sites like Kickstarter to back projects — has grown quickly. Now investors are pooling their money online to buy real estate.
 
To listen to this story click here: http://www.npr.org/2014/03/18/291023658/investors-pool-money-online-to-buy-real-estate
 
Warren Buffett revealed some of the lessons he’s learned from investing in real estate over the years in his much-anticipated annual letter to Berkshire Hathaway shareholders.  Here is a basic summary from TheRealDeal.com.
 
In the letter, Buffett sizes up a deal in 1986 for a 400-acre farm 50 miles north of Omaha, Nebraska. Instead of basing his investment on the property’s value at the time of purchase — a steal at $280,000 — Buffett valued the property by its future yield, based on predictions that crop prices and productivity would rise.
 
Smart choice, seeing as the farm has tripled its earnings in 28 years and is now worth five times what Buffett bought it for, he wrote in an excerpt published by CNN.
 
“I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside,” he wrote. “There would, of course, be the occasional bad crop, and prices would sometimes disappoint. But so what?”
Buffett then advised budding investors to “focus on the future productivity of the asset” under consideration — not how much the property price will change.
 
“I thought only of what the properties would produce and cared not at all about their daily valuations,” Buffett wrote. “Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard.” Buffett has also scored big in recent years as he grew more confident in the housing recovery, actively acquiring businesses related to the market.
 
That concludes Real Estate Investing News and Notes for this week, have a great weekend everyone!
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