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Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
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Now displaying: Page 1
Aug 13, 2019

Darrin: Bruce Petersen, I ask you what is your BIGGEST RISK? 

Bruce: My BIGGEST RISK you know that's yeah it's the liability we had we've had people die on the property. It's just as you grow a business you can't be the one doing all the jobs you have to entrust people and you hope that they're doing an effective job. You've interviewed them. You coached them you mentor them and their job and you can't be there with them all the time. You just hope that they're doing the right thing and they're not getting you hung out to dry from a fair housing standpoint from a discrimination standpoint. Or that we have done something negligently that causes somebody to pass away. The one death we've had, there was nothing we did wrong absolutely nothing at all. That's probably the biggest risk. You know you're dealing with hundreds and hundreds and hundreds of people on a property. You buy a two hundered unit property, average occupancies probably two to three people. Right. So if it's three people have a two hundred unit property, that's 600 people right there that we are very involved in their lives on a daily basis. So we have a lot of responsibility we take it very, very seriously. But as this is for me you said Bruce Peterson right. I'm a syndicator but I own my own management company so I have a lot more risk than a lot of people have. I would guesstimate 80 to 90 percent of the people that do what I do they want no part of management. They hire a third party management company like us to come in and do it for them so they won't have that risk. For those people, I would say, this is kind of a macro. Be careful what you're doing. Right. Don't get aggressive don't get anxious Don't get impatient. I can't find a deal. Oh this one works. No it really doesn't work. But I gotta get a deal. Don't do that. Don't buy the crap that's in An offering memorandum from a from a listing broker. Don't believe them when they tell you that your taxes are going to go up 3 percent year over year because that's what everybody here is right. You increase your expenses every year by an average of 3 percent. Taxes are different. And if you believe that you could fall flat on your face so don't be overly optimistic. Don't think the economy can't shift because it's going to shift again. We all know it's going to shift. We don't know when we think it's coming kind of soon but we don't know for sure. So just be safe in what you're doing. Don't overextend yourself.

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