Investor Resources

Diversification is essentially the spreading out of risk. That applies to investment real estate as well.

If you are invested in one asset, in one market, you have a single asset risk. This means if a deal goes bad your entire investment is tied to that one asset and the risk associated with it. 

Diversification in real estate can be classified as:

• Multiple investments in the same type of asset: Example: investing in multiple apartment complexes in the same state.
• Investments placed in similar assets in different geographic markets: Example: investing in industrial assets in multiple states or regions
• Investing in different assets in different markets. In our opinion spreading out risk in an open-ended fund structure, with multiple assets, in multiple markets gives a conservative approach to our core principle of preservation of capital. 

(44) What is #RealEstate Diversification? #shorts - YouTube.