BIGGEST RISK with Dale Wills

Commercial Real Estate Pro Network

J. Darrin Gross

If you're willing, I'd like to ask you, Dale Wills, what is the BIGGEST RISK?

I think there's two parts to this. One on the insurance side is I'm a huge believer in surrounding yourself by the best people, and insurance is huge risk. I'll use an example. In the Midwest, it's almost impossible to get mold coverage. So if I build a house, mold grows, I've got no insurance coverage. Now, I can get a rider, but if I don't have an insurance agent that's a pro that really knows their stuff, I've got massive exposure, because mold risk is one of the biggest risks in the Midwest, and so if you don't have somebody that knows their stuff, you almost might as well not even have an insurance policy, you know. So don't you know? I don't want to disparage agents, but you know, the guy you buy your auto insurance from and your homeowners insurance is not your guy when you start having rentals or you're in big trouble. So that's one thought I had from a risk standpoint.

I think the biggest risk is what you don't. Know, you know what? What do you not know? And that's where I think it's important you have experts around you, because even then, you can get in trouble. You know, where we've done projects and we thought we knew everything, and we tested the soils, and we tested the ground, and we had the best of the best experts, and we started digging, and we find five feet under the ground there was an old abandoned gas station that we should have known about. That's a pretty big risk. And so that's what I worry about it if a friend Keith Cunningham teaches a principle, when you look at any deal, identify what's the best that can happen. And you know, if that's really easy for entrepreneurs to do, we always can see the best that can happen. So we have this long list what's the best, then what's the worst that can happen? And then I we look at that. If there's not a long list of the worst that can happen, we don't do the deal, because there's always a negative to every deal you do. There's always a drawback. And if we're not seeing it, we're missing something. So we need to go back and look. What are we missing? Once we've done that, we say is the worst case scenario? Can I live with that in order to get the best case scenario? And if I can't live with the worst case scenario, we pass on that deal. But I but that still answer. What you don't know if is your biggest risk. For us, that's our biggest risk is the unknowns, and some of it, it's unknowns you can't predict, you know, we talked about the covid. You can't predict that, but you better be ready to be able to shift pretty quickly.