In 1983, chairman and former CEO of Berkshire Hathaway (NYSE:BRK, BRK.B)) Warren Buffett made one of the most unconventional deals of his career. He bought 90% of Nebraska Furniture Mart for $60 million. No audit. No team of lawyers. Just a 1¼-page contract and a handshake.



<h2>A Business Deal Built On Trust</h2>



The seller was 89-year-old Rose Blumkin, better known as Mrs. B. Born in Belarus, she immigrated to the U.S. with no money, no formal education and no English. She started NFM in a basement with a $500 loan in 1937 and turned it into one of the biggest furniture retailers in the country.



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Buffett didn’t rely on spreadsheets or investment bankers. He had shopped at NFM and was blown away by the prices and customer experience. That was enough. “Mrs. B simply told me what was what, and her word was good enough for me,” Buffett wrote in his 2013 letter to Berkshire Hathaway shareholders. “We completed the deal without the involvement of investment bankers or lawyers (an experience that can only be described as heavenly).”



Even more remarkably, the company’s books weren’t audited. “This purchase is being made without any audit whatsoever of the books or the inventory or anything about this business  and that’s unheard of in business,” Buffett said at the time.



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<blockquote>Some vintage footage from back in 1983 when Warren Buffett bought Nebraska Furniture Mart. &#34;This purchase is being made without any audit whatsoever of the books or the inventory or anything about this business — and that's absolutely unheard of in business.&#34; pic.twitter.com/7slEFjILUD— Kevin Carpenter (@kejca) October 26, 2024</blockquote>
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Mrs. B stayed on after the sale, working 70-hour weeks until her family pushed her into retirement at 95. Annoyed, she opened a competing store across the street. Buffett had not included a noncompete clause, so she was free to do it. Within two years, her new store was the third-largest carpet outlet in Omaha. Buffett eventually bought her out again, this time with proper legal paperwork.



Buffett often praised her business instincts. “Put her up against the top graduates of the top business schools or chief executives of the Fortune 500 and, assuming an even start with the same resources, she’d run rings around them,” The New York Times quoted him saying in 1984.



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<h2>Texas-Sized Growth</h2>



In 2015, NFM opened a store in The Colony, Texas that spanned 1.8 million square feet, making it the largest home furnishings store under one roof in the world. Buffett said that it was a proud moment after working with the Blumkin family for 30 years. He predicted the Texas location would surpass NFM’s Omaha and Kansas City, Kansas, stores, each already pulling in about $450 million annually at the time.



For investors looking to follow in Buffett’s footsteps without buying an entire store, platforms like Arrived make real estate investing more accessible. Folks can invest with as little as $100 in shares of rental properties and potentially earn monthly income and long-term gains, without the stress of being a landlord.



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In 1983, Warren Buffett acquired 90% of Nebraska Furniture Mart for $60 million through a handshake deal, without audits or lawyers. The seller, Rose Blumkin, founded the company in 1937 and continued working until age 95. Buffett praised her business acumen, stating she could outperform top business graduates. The store expanded significantly, opening a 1.8 million square foot location in Texas in 2015, which Buffett believed would surpass other stores in revenue. This unconventional deal highlights Buffett's trust in personal relationships over formal processes.

- In 1983, Warren Buffett purchased 90% of Nebraska Furniture Mart from Rose Blumkin for $60 million, relying solely on a handshake and a brief contract.  
- Blumkin, who launched the business in 1937 with a $500 loan, remained active post-sale, ultimately opening a competing store after Buffett omitted a noncompete clause.  
- By 2015, Nebraska Furniture Mart expanded to become the world's largest home furnishings store in Texas, a testament to its growth under Buffett's partnership with the Blumkin family.

Warren Buffett Bought Nebraska Furniture Mart For $60M With A Handshake Deal In 1983. He Relied On His Shopping Experience Instead Of Audits