Warning: fsockopen(): php_network_getaddresses: getaddrinfo failed: Name or service not known in /home/irreia/public_html/wp-content/plugins/topsy/topsy.php on line 337

Warning: fsockopen(): unable to connect to otter.topsy.com:80 (php_network_getaddresses: getaddrinfo failed: Name or service not known) in /home/irreia/public_html/wp-content/plugins/topsy/topsy.php on line 337
Manage Investor Risk (if you are the principal) | International Residential Real Estate Investors Association
Thursday June 29th 2017

Join Us On

join the IRREIA linked in group

Manage Investor Risk (if you are the principal)

Just the other day, a friend of mine called looking for a quick replacement investor.  Her committed investor changed terms on her at the very last moment.  The terms demanded 1) came on the closing day, 2) arrived after the seller had signed, 3) were given with my friend already guaranteeing the loan, and 4) would push the project into the red at closing.

While this is an underhanded move, equity holders frequently seek strength in this way.

As investors, how do we protect against this?

I’d preface my remarks by saying that I’ve been in this position and I won’t go there again.

The key is to take several steps to protect your position including:

1) Require investors to deposit funds prior to closing with pre-agreed release terms.

2) Have a stable of investors prepared to fill in should someone flake out.

3) Keep room in your deal for a shortfall.

4) Stay within easy reach of resources at your disposal.  Stretching creates extreme risk.

Good luck and good hunting.

Real Estate Investor

“The IRREIA - Making residential real estate investing more fun and rewarding
through better education, tools, information, and networking!”

sign_up_button.jpg

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Reader Feedback

One Response to “Manage Investor Risk (if you are the principal)”

  1. [New blog]: Manage Investor Risk (if you are the principal) http://bit.ly/921NzK

Leave a Reply


Warning: Illegal string offset 'solo_subscribe' in /home/irreia/public_html/wp-content/plugins/subscribe-to-comments/subscribe-to-comments.php on line 304

Subscribe without commenting