CalculateRealEstateROI

Risk

Counterparty Risk

Exposure to PM, lender, tenant, contractor, or partner default — managed through diversification and contracts.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Core concepts

Single-counterparty exposure

Avoid one PM, lender, or contractor controlling majority of portfolio.

Contract discipline

Standardized documents with default and cure provisions.

Examples

  • Portfolio with 3 PMs across markets, 2 primary lenders, multiple contractor relationships.

Practical applications

  • Multi-property operators.

Common mistakes

  • Single PM controlling entire portfolio.
  • Verbal agreements with contractors.