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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
Oct 20, 2020

I'd like to ask you, Travis Watts, what is the BIGGEST RISK?

 

Travis Watts  47:39  

I would say the BIGGEST RISK in passive investing to me is partnering up with the wrong team. It can be disastrous, as we've talked about, but, you know, if you can't execute a business plan, specifically if we're not talking about value, add real estate. So say we're talking about new development new construction, it can be a very bad scene. So I would say you're aligning yourself with the right folks picking the right partners and doing your due diligence up front to mitigate those risks. And in the deal itself, you're looking for a sponsor or or yourself if you're doing your own deals to be as conservative as you possibly can be. You mentioned earlier on the call cap rates, you know, on real estate. So if you're buying something at a five cap, you should be and you're hoping to sell it in five years, you'd like to see a higher cap rate down the road, right? Maybe you project a sell at a six cap, you're just being conservative in case the market softens in case COVID ends up being a, b, c or d. You're using your best judgment to mitigate risk that way. So those are kind of the to two part question. Two part answer.

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