Warren Buffett trusts 2 ‘solid’ assets for his grandkids — both could pay out for years. Build generational riches now

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Warren Buffett is best known as one of the greatest stock market investors of all time.

But some of the investments he has spoken most glowingly about aren’t stocks at all.

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In a 2013 letter to Berkshire Hathaway (NYSE:BRK.B) shareholders (1), Buffett reflected on two personal investments he made decades earlier — both far outside his usual world of publicly traded companies.

“The two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren,” he wrote.

He also projected that the income from the two investments “will probably increase in the decades to come.”

So what did Buffett buy?

The answer reveals a lot about how the legendary investor thinks about building wealth that can last for generations.

Buffett’s ‘no downside’ investment

The first opportunity appeared in 1986, after a bubble in asset prices had burst in the Midwest.

Buffett paid $280,000 for a 400-acre property about 50 miles north of Omaha — considerably less than the amount a failed bank had previously lent against it.

The asset? A farm.

The Oracle of Omaha admitted that he “knew nothing” about operating a farm. But his son had a passion for farming, and Buffett was able to learn about the farm’s production of corn and soybeans and its operating expenses.

Buffett then calculated that the normalized return from the farm would be 10%. He also believed that productivity would likely improve over time and that crop prices would increase. He highlighted that “both expectations proved out.”

It didn’t seem to be a hard decision to make, as he remarked, “I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside.”

That confidence paid off. Buffett noted that the farm had tripled its earnings by 2014 and was worth five times more than what he paid.

The lesson wasn’t simply that farmland went up in value. Buffett focused on what the property could actually produce — and whether those economics made sense at the price he was paying.

That gets to one of farmland’s most enduring appeals: Come what may, people always need to eat.

Farmland also serves as a natural inflation hedge. During inflationary periods, rising food prices often drive up farmland values, helping preserve investors’ purchasing power.

Buying physical farmland can also come with big risks, and farmers today are struggling amid the Iran war and serious pricing pressures. But these days, you don’t need to buy an entire farm — or know how to grow crops — to gain exposure to the asset class.

FarmTogether gives accredited investors a way to invest in fractional ownership of U.S. farmland. That means investors can potentially earn income from crop production while also benefiting from the value of the land if it increases over time.

The platform has $217 million in assets under management across 51 funded deals, covering eight states and 15 crop types. FarmTogether says each offering goes through a 105-point due diligence process, and less than 1% of deals in its pipeline make it onto the platform.

Farmland has also historically held up differently than other assets during downturns. According to FarmTogether’s own data comparing NCREIF indices from 1992 to 2025, returns from farmland have shown a lower correlation to inflation than stocks, bonds or REITs.

Skip 6 decades of reading: Get Warren Buffett’s best investing lessons in 1 free guide

The investment Buffett never even visited

Buffett’s second example came several years later — and once again, he went shopping after a bubble burst.

In 1993, Buffett learned about a retail property located next to New York University (NYU) that was being sold by the Resolution Trust Corporation (RTC) in the aftermath of the commercial real estate bust.

The numbers immediately caught his attention.

Buffett conducted his analysis and determined that the unleveraged current yield from the property was approximately 10%. He noted that the RTC had under-managed the property, and leasing the vacant stores would enhance its income.

More importantly, Buffett identified a major opportunity: The largest tenant, occupying about 20% of the space, was paying rent of only $5 per square foot, while other tenants averaged $70. He wrote, “The expiration of this bargain lease in nine years was certain to provide a major boost to earnings.”

And then, there was the location.

As Buffett memorably put it: “NYU wasn’t going anywhere.”

Armed with this analysis, Buffett joined a small group of investors to purchase the property. The decision proved to be successful.

“Annual distributions now exceed 35% of our original equity investment. Moreover, our original mortgage was refinanced in 1996 and again in 1999, moves that allowed several special distributions totaling more than 150% of what we had invested,” Buffett wrote.

Perhaps the most Buffett-like detail of all? “I’ve yet to view the property,” he said.

How to add real estate to your portfolio

The combination of rental cash flow and potential appreciation is precisely what has long made real estate a popular choice for investors. But buying an investment property yourself usually means coming up with a large down payment and taking responsibility for everything from vacancies to repairs.

After all, the median sale price for a home in the U.S. was $393,300 in the second quarter of 2026 (2). At 20% down, that’s $78,660. Factor in that 30-year fixed-rate mortgages are hovering around 7.24% as of Nov. 4 (3), and buying a property outright might not be nearly so appealing — and that’s before maintenance and tenant management factor into things.

This is where fractional investing in real estate can help lower the barrier of entry, while potentially netting you passive income in the short term and equity over time.

Arrived, a real estate platform company backed by investors such as Jeff Bezos, helps investors get into SEC-qualified investments in real estate, including rental homes, vacation rentals and diversified funds.

In addition to any property appreciation, Arrived’s properties can help you earn a passive income stream without any of the extra work that comes with being a landlord. No midnight maintenance calls over burst pipes required.

All you have to do is sign up, then you can view a selection of vetted properties and start investing with as little as $100. That way, you can make sure the platform is right for you.

And, for a limited time, investors can get a 2% account match when opening an account and adding $2,000 or more.

Invest in big ticket real estate

Although opportunities to invest in non-residential real estate are limited, some exist — and they can offer unique benefits.

For retail, these include longer lease terms, potentially higher returns, and more resiliency compared to single or multifamily real estate (4), but the buy-in tends to be higher as a result. Industrial properties give you a similarly long lease horizon and can sometimes be nested under a broader commercial banner.

Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.

Lightstone DIRECT lets individual investors tap into the institutional approach of Lightstone, one of the largest privately held real estate investment firms in the U.S., with $12 billion in assets under management.

The platform eliminates middlemen and the extra layers of fees that can add up in traditional real estate investing, usually known as “fee stacking.” This streamlined approach provides more direct access to institutional-quality deals.

Over nearly four decades, Lightstone has delivered strong risk-adjusted performance — including a 27.6% historical net IRR and a 2.54x historical net equity multiple on realized investments since 2004.

Each opportunity requires a $100,000 minimum and undergoes a rigorous review by Lightstone’s principals, including founder David Lichtenstein.

Lightstone also invests at least 20% of its own capital in every deal — roughly four times the industry average. With skin in the game, the firm ensures its interests are directly aligned with those of its investors.

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Article Sources

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Berkshire Hathaway (1); Federal Reserve Economic Data (2), (3); Lendcity (4)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.