Donald Trump was interviewed on CNBC this morning. Repeating what Warren Buffett and he both said a few weeks ago, Trump stated that now is a amazing time to buy real estate. Trump’s primary reason was a little different than Buffett’s however. Buffett was looking at the value of houses where the prices are a third off of their highs coupled with record low mortgage rates. The Donald, on the other hand, was suggesting real estate because he is expecting hyper inflation at some point in the future. Real Estate would be expected to serve as an effective hedge against inflation. Nassim Taleb, author of the book “The Black Swan” was also on TV today and mentioned real estate (along with stocks) as necessary investments against the future hyper-inflation that he is predicting.
Trump brought up one interesting thought regarding REO, or bank owned properties for sale. He suggested that if you are buying a property from a bank, they may be more willing to give someone a mortgage if it is to take one of their own properties off of their hands. I am not sure if this is true or not, but it does make some sense. Click here to hear Trump’s interview.