With over 150 years of combined real estate investment experience we are often asked by our clients how to more intelligently invest their funds to mitigate RISK. We recommend that each separate investment property be treated as if it was the only asset owned by the investor and the investor should approach ownership for the long term. We do not suggest high leverage. A new entity should be formed for the ownership of each asset to address potential liability.
Each asset should be structured as if no other source of funds would ever be available to handle issues. The single biggest risk is the risk of vacancy. To address this risk we suggest that our clients set aside an Actual Cash Reserve that is equal to one year of the total obligation for the payment of principal, interest, taxes, and insurance.