Risk Management

Remember that all investments carry some elements of risk. What I want you to consider is that each investment will be different, and each needs to be looked at individually. Some require your time and management, and some will only require your investment.

In the analysis of any investment we must assess the risk. Is the return worth the risk. As an investor, you will each have difference tolerances for risk based on your financial situation and your understanding of what you are buying.

The first numbers you will crunch before any consideration of an investment in commercial real estate is your own. You have to divide your own funds into base capital and risk capital. Use only the risk capital, to invest in Commercial Real Estate or that which if lost will not affect the future support of your current family lifestyle.

Invest so that at the end of the day, your investment success or failure does not have any effect on your base capital, it either increases or decreases your risk capital.

Don't put all your eggs in one basket. You heard that since childhood. My guess is that if you are reading this then you have not yet diversified into commercial real estate, or you are not completely comfortable with this kind of investment.
One way to avoid losing all your investment is to diversify into different investments so that market changes, fluctuations or just bad luck, cannot take all of your risk capital at one time.

Certainly there are forms of ownership that you should consider such as limited liability corporations or partnerships, which limit your loss to your investment, and leaves your base capital intact. Remember, see a lawyer or CPA to get advice on what's best for you.
Do your research into each investment. Use the internet, it is the easiest way to find out as much as you need to know. Ask your broker, ask your lawyers and CPA before you write your check. But before you get there let me crunch the numbers for you.