Risk Management

[Travis Barron]

In learning about investments, it seems most material speaks to the upside of an investment. After all, this is the attraction to us investors, right? However, I'd like to hear more about the ugly side of REI, the downside, the risks and how to manage them.

Not necessarily the horror stories, but I was wondering what risks other BP members have identified/experienced and tips to mitigate these. To me, I see REI risk broken into two broad buckets, 1. Financial and 2. Non-Financial. I know, quite innovative thinking, right? For this post, if possible, I'd like to focus on the Financial side. If this post goes the opposite route, that's perfectly fine as well as there's always plenty to learn.

A few of the financial risks I can think of to start off are:

A. Leverage & its amplifying effect during price depreciation,

B. unexpected prolonged vacancy period,

C. Higher than expected operating costs

D. .....

These are just a few quick ones but would love to hear what the BP community is thinking!