The game of risk vs. reward is one which investors play on a regular basis. Understanding this game is essential when it comes to investing in commercial properties. Christopher Linkas has a great deal of experience in this field. He has worked in the collateral valuation of repackaged loans during the S&L crisis of the 1980s and 1990s. He followed this up with a long career in the investment field. Investing in real estate is a riskier venture and going ahead with it without prior planning can be considered reckless. With this knowledge and experience, Christopher Linkas’ advice may be regarded as priceless.
All levels of investing have different risk profiles and levels of participation. Assuming more risk is a double-edged sword, give you a better business proposition even though a bid is just but a hazard, a foray into the market with success dependent on many factors. Reinvestment, rework, and renovations firm up property and broaden forum possibilities of direct engagement. Growing assets need patience. Lengthier holding periods are recommended to allow substantive rework, sponged and soaked reinvestment realized as financial improvements of yields.
Real estate operators must also look out to skillfully maneuver complex legal hurdles and setbacks that may be met in acquiring a new property, whether it is a thriving enterprise or a new concept and immaculate roll out of development both native and original. Such initiative may meet opposition in the market manifest and the form of legal and structural hurdles.
Operators may find properties with pending succession disputes, bankruptcy proceedings or even a pending foreclosure. These redefine the transaction engagement and require specialized and clinical disentanglement. Risks profile vary in specific ways across the three bands mentioned by Christopher Linkas in his talk. These are low risk and core property, moderate risk and value-add property, high risk and opportunistic properties and ventures.