The last two years have felt like a slow-motion car crash in commercial
real estate.
That goes for office space, of course, but it also goes for multifamily
and other commercial property classes. Look no further than this piece
by BiggerPockets if you need a refresher. Two regional banks went under
because of the industry’s woes in 2023.
But even in one of the worst stretches for commercial real estate on
record, many operators and passive investors have continued earning
solid returns. Since 2022, I’ve invested in nearly 30 passive real
estate deals as one more member of SparkRental’s Co-Investing Club. Of
those, only one has imploded and resulted in a loss—and it was one of
the first deals we invested in as a club.
One advantage to getting together with a group of other passive
investors every month to vet deals is that you get better at doing it
and quickly. This year, I’ve shifted how I think about risk.
As you continue (or start) investing passively in real estate, consider
this framework for looking at risk.
Keep reading the article here: https://www.biggerpockets.com/blog/the-extra-downside-protection-i-look-for-in-investments
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