RCRE - Risks are Opportunities

Dylan Marma and Mike Taravella discuss the risks when investing in a multifamily syndication:

• Interest Rate Risk - This is the risk that as an investor you become less able or unable to cover your debt burden.  
• Liquidity Risk: Risk that the investment is not able to be sold at the planned time. This is amplified in the event of a high point in the market, or being in a distressed position in need of a "fire sale".
• Funding Risk: The risk that the general partner falls short on their raise. This is common in the event of a fund when investors are required to invest via a capital call.
• Concentration Risk: The risk of loss due to having all of your eggs in one basket or being overly concentrated in one asset/asset class. 
• Credit Risk: This applies largely to debt investments or to real estate investors dependent on tenants. You run the risk of having a poor quality tenant and/or having their credit drop during the holding period.
• Inflation Risk: The risk of loss in purchasing power because the value of your investments does not keep up with inflation. 
•  Horizon Risk: The risk that your investment horizon is shortened due to an unforeseen circumstance, such as a fallout of the partnership. 
•  Political Risk: This is the risk that some level of political event/ordinance poses a threat on the operations or profitability of the business.
•  Currency Risk: Currency risk is the potential risk of loss from fluctuating foreign exchange rates
• Operational Risk: The risk of loss as a result of inadequate processes and systems to support the organization. 

Contact Information:

[email protected]

[email protected]

For more information/to connect with Rand CRE:

www.randcre.com

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