Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss today's opportunities, problems & solutions in Commercial Real Estate.

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BIGGEST RISK with Viktor Jiracek


J. Darrin Gross

I'd like to ask you, Victor Jiracek, what is the BIGGEST RISK?

 

Viktor Jiracek  

Yeah, no, I think that's that's great question, happy to answer it. I'd say it's all about the numbers. So I always teach and preach. It's like profit margin, like margin of error, like how much you know, profit, do you have potential in the deal, because if anything goes wrong, like a takes longer than you want, or doesn't sell for as much as you want, you have to go over repairs, like that's all going to eat into your profit margin. So the more profit buffer or profit margin you have, the better. So again, it's all about the numbers. And there's been a lot of deals where like we set out to make 30 40,000. That's, that's great. And then one issue came up, and then another issue came up and another issue came up. And then we walked away with 10,000. But luckily, we had that initial, you know, profit buffer to work with, or else we would have been in the red. So with that same example, like if we initially wanted to make, we said, like, Hey, I just want to make 15,000. Like, if I can make 15,000 on this, I'd be happy. And then the issue comes up in that issue, another issue another issue, and then suddenly, you're in the red. So that happens a ton. So that's why I recommend in terms of risk, like just protect yourself, like if you buy any, any property for the right price, like every single thing can go wrong, and you can still be profitable. But again, it's you make money when you buy is, is the segue from that. But it's really like profit margin buffer, just in case anything goes wrong, and it will go wrong. That's the other thing. It always takes longer than you want. And it always costs more than you want.


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 2021-07-13  1m