BIGGEST RISK with Jason Salmon

I'd like to ask you, Jason salmon. What is the biggest risk?

 

Jason Salmon  59:25  

Well, the biggest risk with any investment is losing your money. I mean, that's really it. So then the question becomes how to mitigate that from there. So you talk about avoidance. And again, I'm compelled to tell people that anytime they make investments in private placements, there are risks, including what I just mentioned, no guarantee of returns, no guarantee of profits, no guarantee against losses and one can lose their money. So the way to avoid that is by not investing and you know, putting it onto the mattress, I guess, and then you have to figure out you know, what the match protected by, you know, because anytime it gets outside of, you know, under your thumb, you know, that's, that's one thing as far as minimizing and and, you know mitigating for me and our clients is diversification. So, you know, when one has all their eggs in one basket, they then are incurring concentration risk. So then again just because one diversifies doesn't mean that they're avoiding the risk, but they are spreading that risk around. 

 

So we love the fact that DSTs give most investors the opportunity to diversify. And, you know, that's, that's a big motivator, and that's part of my day to day and I remind people of that all the time. Beyond that, though, one also has to determine what their own appetite is for risk. I mean, I've had people tell me that they're, you know, in a great place in life and they want to bring it on, you know, so we talked about with these deals, any of them, it's a risk adjusted return. Now, there are deals and I don't want to get into returns, you know, it's just not something that we can do through this venue. But, you know, returns could be all over the board. So that's, you know, your, what your annual returns are, and it's a risk adjusted return. But for us, you know, it's about you know, when you talk about diversification, we're talking about real estate, so diversify in some cases across asset classes, type of real estate, diversify across geography. In some cases, some people love certain geography, you know, it's okay. It's things we talked about, and diversify across asset manager, different people running the deal. Sometimes people just like certain deals that certain asset managers are running. So That's different ways and different permutations than that when we work with clients, we can mix and match to kind of try to mitigate that risk by way of diversification. But just because people diversify doesn't mean that they're protected from risk. And as far as transferring. You know, for us, I can't really claim to be able to do that, because there is inherent risk, you know, with private placements, it is available to accredited investors. So one, you know, has to have be at a certain point in life, and in the spirit of that has to be comfortable with the potential for loss. And that's why you hear all that, you know, all those disclaimers disclosures with any investing, whether you see it kind of on a screen, or you're working with your friendly neighborhood, financial person, these are all parts of it. And I'm sure this is part of your day to day, but yeah, I mean, there's risk, but hopefully, you know, again, through understanding, I think that's the most important thing, know what you're getting into, you know, manage the risk by really understanding what's behind it. For us. It's real estate. So the great thing is, you know, I oversimplify it sometimes, but really, it's just a tenant or tenants in a building or buildings and their ability to pay their rent. And or, you know, does the deal have debt on it? Could there be a foreclosure? That could be trouble, if that's the situation? So these are things that we talked about, what are the chances that happening? Something on, you know, without alone on it, you know, what does that mean? What's, what's kind of what are some worst case scenarios from a real estate standpoint, you know, as they weigh into each of these respective investments, but again, with any investment, you know, one does have the risk of losing principal.