Managing Investment Risk in Commercial Multifamily Real Estate

Managing investment risk is unavoidable, especially in passive real estate investing. Generally speaking, the higher the risk, the higher potential reward. The opposite is also considered true. Avoiding absolutely all risk is unrealistic, so your job as an investor is to determine how much risk is acceptable to you, and the things you can do to minimize it.

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Underwriting 101

Underwriting in the context of commercial real estate simply means researching all the extenuating factors of an investment and mitigating its risks by allocating resources appropriately. In English: Doing your homework… Learning everything you can, leaving no stone unturned, and figuring out what the cash flows will look like based on the available evidence.

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14 Pros and Cons of Investing in Multifamily Syndications

Investing in multifamily syndications has long been accepted as a stable, recession-resistant investment. Great wealth has been created with commercial real estate like apartments. On the flip side, great losses have been experienced as well. As all investments carry inherent risk, the benefits and disadvantages should be weighed and considered.

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Secret Shopping – The Key to Watching Over Your Investments

Here’s a tricky situation…

You have invested in an apartment syndication that was supposed to make money hand over fist. The operators promised you an 8% preferred return quarterly on your $100,000 investment. Things were going well for the first few quarters, but then you noticed that your quarterly distribution became dismal… Nothing like what was “promised” to you in the shiny brochure.

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How Much Real Estate Should be in Your Investment Portfolio?

This is a hotly debated subject. How hard should your portfolio flex for real estate? Many traditional investment advisors, especially the ones that work with hedge and mutual funds, will tell you 5%-15% should be your maximum real estate exposure with the rest of your investments in public markets (stocks, bonds, ETFs and mutual funds). I will always question this advice and reconcile where that advice is coming from, as there is quite a lot of bias in the investment community. Fidelity, for example, doesn’t list real estate as part of an investment diversification strategy in their many investment ideas articles. Blindly following traditional rules of thumb can leave the investor more exposed to unnecessary risk.

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5 Tips for Preserving and Increasing Your Net Worth

I have a friend who has a little 15 years of investing experience, and has some very sage advice for those of us who wish to follow in his footsteps. His name is Manuel. (This may or may not have been changed to protect his anonymity.) He is a very disciplined investor, buying and holding many single-family homes and smaller properties, and now prefers to invest in multifamily syndications.

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Start Here

So… You want to invest in real estate but your time is limited and you do not want to have to manage tenants, toilets and trash.

Many of us know that investing in multi-family real estate can be much safer than investing in the volatile stock market. We want to preserve and even grow our wealth, retirement fund or our nest egg.

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How to Pick a Syndicator to Invest with Them Directly – Ask the Right Questions

Before you evaluate syndication deal opportunities, you first need to evaluate the actual syndication teams. Knowing how to pick a syndicator is a skill that every passive investor needs to hone. Good teams will usually have good deals, so if you are looking for opportunities, finding the team is the higher priority. You may have seen other articles on Actively Passive telling you how to find syndicators. This article will show you what needs to happen next – the interview.

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5 Multifamily Investment Opportunity Characteristics

Each multifamily investment in a real estate project deal is unique, so it is sometimes difficult to compare them against each other. One way that you can do this is to compare the different characteristics of risk in order to make an informed decision on which one to invest in. You ultimately want to make sure that the riskier a project might be, that you are getting paid for that risk.

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