Winning Real Estate Strategies for Uncertain Times

How do the smartest real estate investors minimize their risks in uncertain times?

“Five Ways to Reduce Commercial Real Estate Risks” an article by Will Moore from Pacific Security Capital offers some excellent ideas. Although Moore writes from the perspective of a company that specializes in commercial real estate, its strategies apply to most any real estate investing tactics you can make.

Here is a summery of the five of the risk-minimizing strategies it recommends:

1.      Buy or build from the market’s perspective. Understand what product type and demographic location the highest market demand is seeking and how you appeal to it.

2.      Know market costs and dynamics, as well as market prices, so you can position your project in the most favorable light with lenders and investors.

3.      Know what your own financial capacity truly is, not simply what you’d like it to be.

4.      Form your team for the value they bring, not the jokes they tell. We all like working with friends, but your team should be made up of people with proven knowledge and accomplishments.

5.      Don’t fail to ask the basic questions. How much cash are you willing to risk in a purchase or project?  What is your net worth, aside from the project? How many of the assets on your balance sheet could be liquidated for cash if necessary?

There is another very sound idea behind this article, although it is never stated openly. It is that successful investors don’t hide from challenges.  They have the expertise to stay active and profitable, even in uncertain times.