What do you do if your commercial real estate investment fails?

Accept that you have made a mistake and try to find its cause so it won't repeat. Don't be afraid to book losses, sometimes freeing up capital can open up the mind to new ideas and possibilities. Reinvest in a new asset from your experiences and learnings or try investing by partnering with an expert person who can give their perspective on your investment opportunities

The first question I always ask my clients is, "How much time do you really have before selling, liquidating, or losing ownership, etc.?" Time is the most important factor that will determine which turnaround strategy you can implement. No Time - Sell now Have Time - Add Value before sell

Some clients cannot afford professional advice at the cash-strapped stage. In that case, the most valuable and cost-effective advice you can get is from asking other experienced real estate investors and developers in your field, whom you can trust and share your struggles with. 1) They can provide valuable feedback and direction. 2) They can refer you to their professionals to help. 3) They may know someone who will buy your property or they may cut you a deal themselves. ***Remember to ONLY ask people you can trust and who will not take advantage of you.

Often professionals affiliated with a transaction will see the usually-zealous deal team’s communication disappear when a deal goes south. “Success has many fathers, while failure is an orphan.” Stay motivated to see the deal through and make the best of a bad situation. You can still save your firm and/or yourself substantially. You will also enhance your reputation as someone the team will want to work with in the future.

Explore Workout Options. Contact lenders or stakeholders to discuss potential workout options such as loan modifications, refinancing, or restructuring agreements to alleviate financial pressure.

After a CRE investment failure, assess what went wrong, focusing on due diligence, market conditions, and financial planning. Accept responsibility and use the experience to learn, seeking guidance from seasoned professionals. Reevaluate and adjust your investment strategy, emphasizing risk management and diversified portfolio building. Start with smaller, safer investments to regain confidence. Maintain a long-term perspective, understanding that setbacks can be growth opportunities. Share your experiences with peers to learn collectively and prepare for future successes.

At the risk of sounding overly cliche - Failures are opportunities for growth. No one likes failing, no one likes making mistakes, but it is essential that you learn from the experience. The path to success is often through multiple failures. If your investment fails, figure out why. Whether it was your basic assumptions being wrong, not understanding the market, unforseen issues and other aspects not considered, it is imperative that you understand why failure happened and make the necessary changes in thought/process/execution to avoid those same failures in the future.

All reward comes with risk, and you must accept that challeneges, mistakes, and failures are all but inevitable in life. It's part of the learning and growth process. If it was easy everyone would do it, but if you dwell and let those mistakes define you and doubt yourself, then how can you ever expect to find success? You need to believe in yourself before anyone else will. Assess the situation, understand what went wrong, learn from it and move forward.

If a commercial real estate investment fails or is failing, the 1st question is whether there's a mortgage involved or the property was purchased for cash. If there's a mortgage and payments are not being made you'll face foreclosure or can possibly hand the keys back to the lender. The question here is whether a personal guarantee is involved. If it was a cash purchase then sell and take your medicine.