BTW: a Fund-of-REITs is still tracking a relatively small, unbalanced subset of what constitutes the US property market … by contrast, you can easily buy an Index fund that tracks a representative portion of the US largest businesses.

As an aside, most of the large real-estate is owned by those large US – and, overseas – corporations, rather than REITS.

REIT index funds do exist- VNQ is an example here is the description: The fund normally invests approximately 98% of assets in stocks issued by equity real estate investment trusts (REITs) in an attempt to track the investment performance of the Morgan Stanley Capital International (MSCI) US REIT Index.

I’m not sure that the skills picking a good house to live in really translate to picking good investment home. Why is a nice house in a good neighborhood necessarily a good investment? I’m sure a lot of nice homes in good neighborhoods are upside-down right now because they were bought at too high of a price! I would look for a house that woulb be easy to rent – growing area and rental market not saturated. Ideally the neighborhood is nice enough to feel safe but that might improve in some ways between when I buy and sell. Finally, I would want it to be selling at a price that would make renting immediately cash flow positive.

-Rick Francis

Also ask yourself this simple question, Did Warren Buffet start out with BILLIONS of dollars to be “involved in the underlying company”? No, he started out like the rest of us and built up a few “million” doing ground work, studying individual companies and investing what he had available in them, before he could get too “involved” with any major underlying companies and begin purchasing majority shares of the whole.

Go to Coca Cola with even a few tens of millions and try get involved with the company other than simply buying shares in their stock and the corporate leaders will probably look at you like your standing on the street corner with a coffee can full of change…

BTW: Warren is on record (and he repeated this at the AGM that I attended this year) as saying that he WOULD invest up to 60% or more of his capital in just one investment (a.k.a. back just one horse) …. Charlie Munger said he would even go as high as 80%. He said that his problem is that his investment capital is too large: no one horse is suitable right now.