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The Biggest Risks in Real Estate Investing

With Percy Nikora, Co-Founder

The biggest risk would be finding the right deal, by doing your due diligence, making sure there aren't any hidden surprises, so to speak. You always try to mitigate part of that when you're finding the deal, underwriting the deal. I'd say just making sure that the information that you're being given during due diligence that you vet that out and validate that. Don't just rely on what the seller has given you or the broker or has given you.

Once the deal is done, they're gone, so you need to make sure you do your homework; really dive into the deal. Make sure your projections are realistic. We do a lot of market analysis and run some different scenarios and simulations to stress test the deal; make sure it's a deal- again, we're putting our money in, because every deal, we invest our own money.

Then, sticking to a schedule, especially if there's a lot of construction involved in the deal. These deals are based on hitting certain milestones; refinancing at particular points in time. So, just making sure that, from a construction standpoint, you're sticking to that schedule.

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