Handling the Risk and debt

[Alex Ng]

Hi, I've recently bought one property and under contract for my second one. It's been a wild journey, learning as much as I can. As you scale more and have more properties, you also incur more debt. For people who own multiple units, how do you handle being in so much debt? I know it is good debt but debt is still debt. Are you ever worried if tenants would move out and you cannot cover the payment or if things break down, or god forbid a recession? I read how the more units you have, the "less risky" it can be because you have more units to fall back on if one tenant decided to vacate one unit. At what number of units did you feel comfortable that they would take care of each other if something happened? Are you ever worried if you were to go into foreclosure and lose all of your portfolio? What are some ways to hedge against risk? Will putting all my units into a LLC truly protect me if they were to all foreclose someday? I'd love to learn how to manage all the risk and debt as I continue to scale my portfolio.

[Andrew Postell]

@Alex Ng thanks for the post. I'm not here to tell you there's no risk in real estate - because there absolutely is. And OF COURSE we are always concerned about those things.  All of it.  If you owned a stock...wouldn't you be concerned about the value of that stock?  Company performance?  Recession?  Everything has risk...even if you do NOTHING - there's risk in that too.

I'm also not here to tell you that you shouldn't worry about this stuff.  I would tell you to NOT do anything that you don't feel comfortable with. 

There's so many things to say about risk and investing and what commodity or platform is right for you.  There are tons of resources that say this way to invest is better than that way...I believe in real estate.  It has changed my life.

Hope all of that makes sense.