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Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B) is making a big bet on the real estate sector’s recovery.
The conglomerate agreed to acquire (1) homebuilder Taylor Morrison Home Corporation (NYSE:TMHC) in an all-cash deal valued at $8.5 billion, including debt, marking one of Berkshire’s first major moves under new CEO Greg Abel.
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And Buffett seems impressed.
“Greg did it faster than I could have done it, more easily than I could have done it, and I never spoke to the CEO,” Buffett (2) told CNBC’s Becky Quick. “It has been launched.”
It’s a powerful endorsement from the Oracle of Omaha and a clear sign that Berkshire won’t shy away from big deals in the post-Buffett era. If anything, Buffett seems confident that Abel will be able to take the company to new heights.
Under the deal, Berkshire will pay $72.50 per share in cash for Taylor Morrison, valuing the homebuilder’s equity at approximately $6.8 billion and representing a 24% premium to its May 29 closing price of $58.50.
Investors noticed. Taylor Morrison shares rose more than 22% after the deal was announced.
Timing is what makes movement so interesting.
Berkshire doubles
The real estate market has been under severe pressure. Mortgage rates remain high. Affordability is at its limit. Many potential buyers have been ruled out. Existing homeowners with low mortgage rates have been reluctant to sell, stifling supply. And homebuilders have had to navigate a difficult combination of higher costs, cautious buyers and economic uncertainty.
But Berkshire isn’t known for following the latest trends. He is known for buying long-lasting businesses when the long-term math looks attractive.
And housing is one of the most essential industries in the United States. No matter what happens in the economy, people still need a place to live.
For Berkshire, Taylor Morrison adds to an already sizable real estate footprint.
Berkshire owns Clayton Homes, a major manufactured housing company. He owns housing-related businesses such as Benjamin Moore paint, Johns Manville insulation and Acme Brick. The company also has exposure to real estate brokerage through Berkshire Hathaway HomeServices.
In other words, it’s not a case of Berkshire suddenly discovering a home.
It is doubling.
In announcing the deal, Abel said Berkshire hopes to unify its site-built home construction operations over time into a combined platform “that will allow us to make the dream of homeownership a reality for more Americans.”
But that American dream has become increasingly elusive for many families.
Home prices have been trending upward for decades. In the past 10 years alone, the S&P Cotality Case-Shiller US NSA National Home Price Index has risen 88% (3), reflecting strong demand, limited supply, and years of underconstruction.
Former Federal Reserve Chairman Jerome Powell has pointed out the root cause: The United States simply does not have enough housing.
“The real problem with housing is that we have not had, and we are on the path to continuing to have, not enough housing,” he said (4).
According to Realtor.com, the gap in housing supply in the United States has exceeded four million homes (5).
That helps explain why Berkshire may be willing to look beyond today’s problems and toward tomorrow’s profits.
The company will not buy Taylor Morrison for the next quarter. He’s embracing the idea that no matter what, Americans will still need housing.
That leaves regular investors with an obvious question: if Taylor Morrison is going private, how can they take advantage of a potential property rebound?
Here are three ways to participate in the game.
Read more: Here’s the median income of Americans by age in 2026. Are you falling behind?
Earn rental income without becoming a landlord
If the United States continues to have a housing shortage, rental housing could continue to be in demand.
That’s one of the reasons why renting real estate has long been a popular way to build wealth. When you own a rental property and tenants pay rent, you can generate a steady stream of monthly income.
Rental properties can also serve as a hedge against inflation. Over time, property values and rents often rise along with the cost of living, helping homeowners preserve purchasing power.
Of course, being a landlord isn’t always passive. Properties require maintenance. Tenants can move out. Repairs can be expensive. And that’s if you can save enough for a down payment to qualify for a mortgage in the first place.
The good news? You don’t have to buy a property outright (or deal with leaky faucets) to invest in real estate today. Mogul is a crowdfunding platform that offers an easier way to get exposure to this income-generating asset class.
As a real estate investment option offering fractional ownership in prime rental properties, it provides investors with monthly rental income, real-time appreciation and tax benefits, without the need for a large down payment or 3am tenant calls.
Founded by former Goldman Sachs real estate investors, the team curates the top 1% of single-family rental homes nationwide for you. In other words, you get access to institutional-quality offerings for a fraction of the usual cost.
Each property undergoes a rigorous vetting process, requiring a minimum 12% return even in negative scenarios. In general, the platform has an average annual IRR of 18.8%. Offers usually sell out in less than three hours, and investments usually range between $15,000 and $40,000 per property.
Sign up for an account and explore available properties here to start investing today.
Take advantage of multifamily real estate
The housing shortage does not only affect single-family homes.
When home prices remain high and mortgage rates keep monthly payments high, many Americans stay in the rental market longer. That can support demand for multifamily properties, including apartment complexes that house dozens, hundreds or even thousands of residents under one roof.
For investors, multifamily real estate can offer exposure to a broad and essential segment of the housing market without relying on a single home or a single tenant.
In a report prepared by JPMorgan (6), Al Brooks, vice president of Commercial Banking at the company, said: “I think multifamily housing is absolutely where you want to be as an investor.”
Accredited investors can now take advantage of this opportunity through platforms like Lightstone DIRECT, which provides accredited investors access to single-asset industrial and multifamily deals.
Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically integrated institutional owner-operator – a sophisticated and simplified option for individual investors looking to diversify into private market real estate.
With Lightstone DIRECT, accredited individuals can access the same industrial and multifamily assets that Lightstone pursues with its own capital, with minimum investments starting at $100,000.
Become a real estate tycoon, from $100
After all, it is not just giants like Berkshire that can capitalize on the American real estate market.
The barrier to real estate investment has never been lower. A key reason: crowdfunding.
Crowdfunding platforms like Arrived have made it easier for everyday investors to gain exposure to the US real estate market without purchasing an entire property themselves.
Backed by world-class investors like Jeff Bezos, Arrived lets you invest in rental home stocks with as little as $100, all without the hassle of mowing the lawn, fixing leaky faucets, or dealing with difficult tenants.
The process is simple: browse a select selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you would like to purchase and then sit back as you begin receiving positive rental income distributions from your investment.
For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
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Article sources
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Taylor Morrison (1); CNBC (2); S&P Global (3); United States Federal Reserve (4); real estate agent.com (5); JPMorgan Chase (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
