Risk in new construction for small multifamily.

[Timothy Munger]

What level of risk would you assume in new construction if the project looks good/viable? Would you be comfortable with putting the majority of your net worth into one project? Say you started a project a good while ago (year or years) and at the time it only required 50% of your net worth as material prices and rents were lower. Now though, material prices and thankfully also rents are higher BUT it requires 90% of your net worth. Would you be comfortable with this or would you view it as too much risk even if the project looks very safe? 

Although you can pull this project off the margins are very thin. It looks very viable but it is easy to get stuck in the sunk cost fallacy. The area is booming or about to truly boom. What do you do?