What To Do When Disaster Strikes In Multi-Family!

On this episode of the Heartland Multifamily Podcast, I talk about the potential risks of multifamily investments. When someone is trying to get you interested in multifamily, all they do is talk about the good things and how you can make more money. But today, this episode is about risks and how to manage them.

Accept that disasters are inevitable.
The world is an unpredictable place. If you’re an investor in multifamily, you have to prepare yourself for something to go wrong, and it will probably happen at the worst time possible — because there is, after all, no good time for a disaster to strike. Disasters like floods, fires, electricity not working, even crimes happening in or near your building. The second worst thing you can do when you are alerted to a problem is to panic. The worst thing you can do is panic in front of your business and investing partners. You need to have the ability to remain logical, and not get emotional, when bad things happen.

1: Align yourself with someone who has been through tough times
If you’re investing in multifamily, you need to have a captain of the ship, so to speak, who has seen rough waters. There is no substitute for experience. And chances are, you won’t know what to do when disaster hits. You need to align yourself with someone who has been through the disaster before. You want people making decisions in your organization who have been through it.

2:Trust
You want to make sure you trust whoever you are aligning yourself with, or have the trust and certainty in yourself that you can make the right decisions. And you need to have that confidence, either in yourself or your partners, before anything bad happens.

3: Leadership
When it comes to deciding who you are going to align yourself with, a lot of investors are looking at the bottom line. They are concerned with tax benefits and potential ROI, and while those are important, all that money can disappear when disaster strikes. And it’s not just the damage itself, which is nothing to ignore, but a poor reaction to it can cause your partners or investors to jump ship. You need to have people working with you or for you who have the qualities that make a good leader. A leader must stay calm under pressure and tell the right people the right things to do.

If you prepare, you can guide your ship through rough seas. It’s nearly inevitable that something will go wrong as an investor, and while you can’t predict or prevent it, you can prepare for it.

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Darin Garman

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