Fears in Real Estate

[Huong Luu]

Hi BP Family, I am putting together a list of Fears/Worries around RE for a presentation I am doing. Last summer I met a gentleman who told me he was worried about the RE market in Canada and US and so liquidated all of his US portfolio and most of his Canadian portfolio. He was worried he would lose his $40M... What would you recommend/say to this person? What fears have you heard from others? Thanks in advance for any feedback.

[Taylor L.]

If he had $40 Million in assets on his own he likely knows more about real estate than most!

At a certain point, most investors' priorities switch from growth to asset preservation. Most hit that point well before they get to $40 Million.

What would I say to this person? "Congratulations on your success. What do you plan to do with the sale proceeds? If you're going all cash, how do you plan to deal with inflation and maintain your purchasing power?"

Fears I've heard typically boil down to the fear of loss. 

"What if you get a bad tenant?" (That one from a family member last week, after we just sold a 225 unit apartment complex and I talked about looking for the next property)

"What if the market crashes?"

And others along those lines.