Managing Risk

[David Bohner]

I have been researching real estate investing for some time now. I am looking at markets in Colorado to wholesale in order to build up a reserve and repair my credit before expanding my buy-and-hold property portfolio. I have had some formal training in money markets and one thing they pushed was protecting your capital with risk management.

When I start to buy properties what should I look for in the market? What are some strategies I could use to protect my investments not only from legal and environmental events but from market fluctuation and retracements? And what is a safe amount to leverage but still grow my portfolio quickly?

[Michael Lee]

Hello, David 

Well your risk level is something you will have to decide what you can handle everyone has different levels of risk. But wholesaling is a great way to find out which local markets are better for buying and holding or renovate and resale, by going to the local REIA meetings and talking with other investors they will know the area best for buying and holding.

There are a number of strategies out there but one I often hear about doing well is the BRRRR method where you Buy Renovate Rent Refinance and Repeat it creates equity and cash flow for you at the same time while also allowing you to invest in better neighborhoods which have better tenants in which you can safely scale up and expand your portfolio

But ultimately the deal is in the numbers so the better you are at analyzing deals the easier it will be for you know when you have found a good deal so practice analyzing as much as you can to sharpen your skills because even as a wholesaler your deal analyzing skills must be up to par because your selling your deals to investors who do this on a regular basis hope this helps