How Do I Get Zero Risk In A Deal?

Comments(11)

• 
  hibby762nd January, 2004

  Zero Risk....doesn't Exist.
  
  Sorry.
  
  You'll be risking your time and efforts at the very least, even if you're never taking possession of the property.

• 
  InActive_Account2nd January, 2004

  Stay in bed!
  
  But then again the roof could fall in!

• 
  jeff120023rd January, 2004

  stay under the bed! It's safer, but then, the floor could collapse.

• 
  thomasgsweat3rd January, 2004

  Zero risk equals zero reward.
  
  Of course this also depends on your definition of risk. High risk to some is regarded as low risk by others.

• 
  Rogue3rd January, 2004

  As the others have noted, there is no such thing as zero risk. At the very least, you are risking opportunity costs (i.e., the cost in time, resources, etc of doing this deal as opposed to using the same time, resources, etc. doing something else) and whatever binder fee you put up on the contract.
  
  However, the least amount of risk may be getting an exclusive option (not lease/option, just straight option) on the property.
  
  Then you can sell/assign your option for a fee or try to set up a simultaneous close. This differs from a regular purchase and sale agreement in that you only have the option to buy and not the obligation to buy.
  
  That's about the least amount of risk you are going to incure in REI. If you don't buy, the seller keeps your binder deposit (which can be as little as $10.00 or whatever minimum your state law requires for "consideration" as liquidated damages and that's it.
  
  Hope this helps
  _________________
  RS (So. CA)
  [ Edited by Rogue on Date 01/03/2004 ]

• 
  InActive_Account3rd January, 2004

  If you are going to make an offer to buy, you need to leave yourself an out (i.e. If satisfactory funding is obtained, if partner approves, etc.).

• 
  telemon3rd January, 2004

  No risk, no reward. TAKE THE RISK!

• 
  GFous3rd January, 2004

  First we need you to define for yourself what you think is "RISK".
  
  I tend to think of risks in degrees. When I do a deal I look at as many possible outcomes that I can think of. If I can live with the worst - then I have measured the risk and decided it is worth the reward.
  
  Generally higher risk leads to higher reward, but there are many ways to temper the risk.
  
  I do not believe I am a big risk taker. Some of my friends believe I am. It is a matter of perception and training or experience.
  
  For example, I put an offer on a building a few days ago. My offer was based on an acceptable NOI that was represented by the sellers agent.
  
  Now, you may say. there is a risk that the NOI was inflated, or that tenant wil move out, or go bust, or the buildng is poorly maintained, or any other of a host of scenarios.
  
  But, I can reduce these risks by a in depth review during my due dilignece period.
  
  All life is a series of risk management decisions. I think one of the reasons I love real estate investing so much is that I have learned how to manage the risks to my benefit.
  
  Gregg
  
  _________________
  Gregg Fous
  Investor/Developer
  
  "Under-promise and over-deliver"[ Edited by GFous on Date 01/03/2004 ]

• 
  GFous3rd January, 2004

  By the way - you may want to read:
  
  http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=422

• 
  pejames3rd January, 2004

  Limited Risk might come in the form of Tax Liens and Deeds.

• 
  WheelerDealer10th January, 2004

  Nothing comes for free.
  
  if you want NO risk, just sit at home and read about it.
  [addsig]