The Greater the RISK, The Greater the REWARD is true USUALLY in Property!
The Greater the RISK, The Greater the REWARD is very true! The opposite of this is also very true. The greater the risk, the greater the chance of failure.
But nothing worthwhile comes in life without risk and hard work. The same is true for business. Let’s address the risk issue. As a multi-business owner, I like to stay risk averse. That means knowing just how much risk is acceptable and how much risk may be too much of a gamble.
Sometimes the greatest successes come from WALKING AWAY! Sometimes they come by taking the biggest, largest risk you have ever seen. But many business owners and entrepreneurs have fallen victim to taking on too much risk—especially at the wrong time. They also fall victim to not knowing how to evaluate a property.
Evaluating a property is similar to peeling back the layers of an onion. With each new piece of information, you get a better idea of what the core project will be. From getting the right paperwork, verifying cash flow, walking the property and estimating the renovation budget there are a lot of different moving parts that must be evaluated. Miss one simple thing and it greatly increases your risk.
However, if you cover the risk your reward will be even greater! There are major steps to take to cover your risk!
First, open your calendar and make sure you have the time to manage the entire flipping process—from the big things like keeping contractors on schedule and payments and inspections on time to the smaller things like selecting finishes and incidental decisions that can play a larger role than you initially think. If you aren’t willing to make the time now to do the legwork, it’s going to be hard to make the time when it really matters.
Always watch your downside risk!