J Darrin Gross
I'd like to ask you, George Pino, what is the BIGGEST RISK?
George Pino
Biggest risk? Um, I'm gonna answer that as the biggest risk I see for investing in real estate when you're just getting started. Because that's kind of what we're talking about as well. And the biggest risk there, I think, is, we see this happen a lot. And you'd mentioned like jumping on the bandwagon. You know, I'm constantly getting calls and our offices getting calls over the last month and a half about adaptive reuse for office space. And yet people have no clue what that is or what to how to go about it. But they hear about it, and they read it and I want to do this not understanding the whole business of it. And that right now, at this point, it's just too cost prohibitive for the most part. It may not be especially if the government's come in and give some incentives. So you know, I think one jumping on the bandwagon but I think that correlates into the ultimate answer, which is not doing your homework or due diligence ahead of time. Just here's my investment money. This is what I heard was going to happen. This is what I'm going to do. You know, I I think the program that you're looking at, you're talking about as far as an insurance company, you know, identifying the risks, mitigating the risks, transferring the risk, absolutely correct in any type of aspect, and investors should be looking at that as well, you know, identifying what the risks are, and then mitigating and we're transferring it. Part of that is also not understanding what's going on in the future or reading that. And, you know, we don't have crystal balls, I don't have a crystal ball, no one has a crystal ball that I'm aware of, was at the Magic Castle a few weeks ago, they had a crystal ball there, but I don't trust it. So. But when you're looking at the future, though, you can still kind of see what's happening, you know, what laws are going to come into place, you know, if it's going to be a headache, if you know if you know, right now there's, you know, insurance industry, at least in Southern California, we're having some issues, you know, there's a lot of carriers are pulling out of California. And that's going to cause an increase in your insurance rates. Now, if you're in a single tenant net lease or net lease property, sure, you're looking at what the tenants are going to pay for that. But you have to think a little bit further, if your triple net expenses are too high, and they're going to offset by trying to lower the rent. So it can't just be a complete passer, you have to think about what's going to work for everybody. And also, the last thing you want is to pass through expenses that cause your tenant to go out of business. So you have to really think about how to go about that and how to plan for that action. And a lot of people don't don't really think about that. I mean, speaking of insurance, I just got a insurance person, I had a company that just denied insurance on a property because the neighboring property had too many homeless people based on aerial photos. So the insurance companies are getting very picky and pushing and that's been an issue. But you have to understand that going in if you're investing that this is going to just be part of my investment strategy here my expenses, they may be this today. But in reality after I close escrow, it's going to be here, and a lot of people don't really look at that and have a plan for that action. They're just kind of looking at that snapshot today. And I think that's the biggest risk that they have if they're just not taking the whole picture in.