Don't become passive investors

[Carlos Ptriawan]

If there's one thing I learnt from the massive crash of CRE in 2023(and 2024) is that "Do not become passive investors". WHen you are passive investor, you become the dumb money , your money is being misused or mismanaged by more experienced sponsor/operator. Why ? because when you are passive and you do have money, you tend not to understand the risk. When market changes, even the most sophisticated sponsor could collapse.

At the end of the day, it's better to become "active investors" where you know every single bit of your investment, your market, your realtor, your contractor, what's the actual repair cost, actual rent, appreciation and so on and so on. Real estate is very tricky, if one can be successful it's because investor can see the hidden pitfalls and trap, and have ability to dance with the unexpected. So understand every bit of risk is important. Don't just blindly follow "oh this is so passive and return is guaranteed", it's never work like that.