Warren Buffett is just not known for being an infinite real estate investor, but he has invested in real estate investment trusts (REITs) thus far and reaped significant rewards.
As an illustration, Buffett’s company Berkshire Hathaway Inc. (NYSE:BRK) used to own shares of STORE Capital Corp., a REIT specializing in single-tenant operational real estate (STORE).
In September 2022, STORE Capital announced that it can be acquired by Singapore’s sovereign wealth fund GIC and Oak Street in an all-cash transaction valued at roughly $14 billion. Shares soared 20% on the news.
Berkshire exited its position in STORE Capital in 2022. In response to the most recent 13F filing with the Securities and Exchange Commission, there isn’t any publicly traded REIT in Buffett’s portfolio.
But that doesn’t imply Buffett has given up on real estate. The an identical filing showed that Buffett is making big bets in housing with recent stakes in U.S. homebuilders.
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D.R. Horton Inc. (NYSE:DHI)
Berkshire’s 13F filing revealed that it bought 5,969,714 shares of D.R. Horton inside the second quarter of 2023. At present share price, the stake is value $641.6 million.
Headquartered in Arlington, Texas, D.R. Horton is America’s largest homebuilder by volume. It operates in 33 states and has a various product portfolio with sale prices ranging from $200,000 to over $1 million. The company also builds and sells single-family rental and multifamily rental properties.
Inside the fiscal quarter that ended June 30, D.R. Horton’s consolidated revenue increased 11% 12 months over 12 months to $9.7 billion. Homes closed grew 8% to 22,985, while net sales orders rose 37% to 22,879 homes.
Net income, alternatively, decreased 19% from a 12 months ago to $1.3 billion for the quarter.
D.R. Horton shares initially surged after Berkshire revealed its stake but later retraced those gains. Nevertheless, the shares have risen over 18% in 2023.
Lennar Corp. (NYSE:LEN)
Lennar is one other heavyweight player in the home construction business.
Established in 1954, Lennar builds homes in various markets across the country. It delivered 66,399 homes in fiscal 2022.
Together with its core homebuilding operations, the company offers financial services, including mortgage financing, title insurance and shutting services.
Inside the third quarter of Lennar’s fiscal 2023, which ended Aug. 31, its revenue from home sales slipped 2% 12 months over 12 months to $8.3 billion. The decline was attributable to a 9% decrease in average sales price, partially offset by an 8% increase inside the range of home deliveries.
Lennar Executive Chairman Stuart Miller said, “Short housing supply, absorbed by strong primary and pent-up demand, continued to define a strong sales environment.”
Berkshire acquired 152,572 Lennar shares inside the second quarter, a position valued at $17.1 million today.
NVR Inc. (NYSE:NVR)
Buffett’s company also picked up 11,112 shares of NVR inside the second quarter. With NVR shares trading at $5,891, the stake is value $65.5 million.
NVR constructs and sells homes under the brands of Ryan Homes, NVHomes and Heartland Homes. It also has a constructing products division, a mortgage subsidiary and a settlement and title services subsidiary.
Inside the second quarter, recent orders for NVR’s homebuilding business increased by 27% 12 months over 12 months to 5,905 units. However the common sales price of latest orders inside the quarter was $447,300, down 5% as compared with a 12 months ago.
NVR stock has outperformed D.R. Horton and Lennar in 2023 — shares are up 28% 12 months thus far.
While investors can leverage homebuilder stocks to access the housing market, recent firms have innovated ways for people to earn passive income from real estate. Here’s learn tips on how to put money into rental properties with as little as $100 while staying completely hands-off.
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This text Warren Buffett Sold His Only REIT Last Yr, But He’s Betting Big On Housing With Three Recent Investments originally appeared on Benzinga.com
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