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What do I consider a risky versus a safe investment?
A risky investment is capital intensive and you may not be prepared to do all of the things necessary to get that asset ready to go to market and get you the ROI necessary.
How can a risky investment be identified?
Number one, the location. It’s the location outside of your normal wheelhouse, is it still a neighborhood that quite hasn’t gotten over the cusp of appreciating the value?
Number two, what is the capital needs of that asset. If it is more than 70 percent of the purchase price then you’re really going to have to think about whether or not that makes sense for you.
Number three, who are the other people that need to be involved in that transaction for you to succeed? If you can’t succeed with your core team that you already have, you need to reassess whether or not this is an acquisition to make.