I as an investor may decide that based on my risk appetite and risk tolerance, I want to pursue higher IRR riskier development deals that use high leverage.

These often include ground-up development, major redevelopments, or distressed assets.Key characteristics:Development or heavy repositioningHigh capital requirementsMarket and execution riskCyclical exposureExamples:Ground-up mixed-use development in an emerging tech corridorDistressed hotel acquisition in a recovering marketOffice or retail conversion into multifamily housingWhy investors use opportunistic:These deals aim for outsized capital appreciation and are typically reserved for a smaller portion of the portfolio due to volatility and complexity.REITs & Private Equity Funds (Liquidity & Diversification)Beyond direct ownership, many investors allocate capital to REITs and private equity real estate funds.REITsPublicly tradedHigh liquidityProfessional managementRegular income distributionsExample:Shares in an industrial-focused public REITPrivate Equity Real Estate FundsPooled capitalOften focused on value-add or opportunistic dealsLonger lock-up periodsHigher return targetsExample:A private equity fund targeting value-add multifamily assetsWhy investors use them:These vehicles provide diversification, passive exposure, and professional management, complementing direct property ownership.Final ThoughtsA well-structured commercial real estate portfolio isn’t about chasing the highest returns—it’s about intentional capital allocation.By combining:Core for stabilityCore-plus for measured growthValue-add for forced appreciationOpportunistic for upsideREITs and funds for liquidity and diversification…investors can build portfolios that perform across market cycles while aligning with long-term goals.The most successful investors don’t avoid risk—they manage it strategically.

We're looking to develop our a portfolio of rental properties in college town(s).

The ROI can be good but please know that developing, marketing, and supporting a commercial software product can be a significant investment of time and energy.

., development versus value add, etc.) or asset classes.

I'm new to real estate investing and struggling a bit with the IRS distinction between a developer/dealer versus an investor. 

I’ve been playing around with computer vision models on my database to quantify this.I took ~8k rental listings and calculated their price premium for each condition rating against the exact average for their specific zip, bed, and bath count.The data shows a 19% spread purely based on condition:  cool stuff!

Ask Kmart and Sears how that worked out.One of the real advantages of private lending is the freedom to develop unique loan criteria.

Hey @Troy Delong, I know this post was from a year ago, but I'm to the point where I'd like to hire a part-time PM to help with my flips/development projects and I'm wondering how to structure that.

@Caroline Gerardo  I know a lot is done on the phone now but if he is going through relators has he found one that does alot of rentals and tried to develop a personal relationship with them.