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What Can You Learn From Warren Buffett’s Newest Investment Strategy?

Published on Wednesday - July 24, 2013

What’s Warren Buffett’s new real estate investment strategy and how can you replicate it?

While everyone wants to reach the status of Warren Buffett in the real estate industry, it is easier said than done. However, what can you learn from his latest investment strategy to apply to your business?

We’ve all heard that Warren Buffett is extremely big on real estate, and that in addition to saying he’d like to acquire several hundred thousand single family homes, he has been busy diversifying into various parts of the industry.

Now he is applying the franchising concept by bringing affiliates from Prudential Real Estate under his Berkshire Hathaway HomeServices brand. Establishing such a partnership can prove to be extremely beneficial to those involved.

Many real estate investors don’t think big enough to organize a real company and build a brand, much less branch out with franchising.

Franchising and creating a franchise network can be incredibly profitable, especially with bringing in up front franchise fees. Of course, it also takes some work and commitment.

An easier, faster and perhaps higher ROI strategy that may take less paperwork to set up for real estate investing companies and individual professionals is setting up an affiliate network.

This can be a global network of individuals, online marketers, real estate agents and brokerages all doing the heavy lifting and bearing the brunt of marketing expenses. Accordingly, you are only expected to pay out on deals actually closed and profits earned.

Also, note that Berkshire’s announcement and revelation of the first round of affiliates to join the brand represents 20% of Prudential agents. Following the 80/20 rule, it can also pay for real estate investing pros to focus on recruiting the top 20% producers to enroll in their affiliate or franchise network. Doing so may create such a formidable team that anyone else will have an extremely hard time competing.

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