Opportunistic strategy
What is it?
It is a real estate investment strategy that seeks to capitalize on special situations and market imbalances. Investors adopting an opportunistic strategy look for high-performance opportunities through riskier investments, such as asset restructuring, purchasing distressed properties, or developing new projects in emerging markets.
The opportunistic strategy is characterized by taking higher risks in search of greater returns. The acquired assets may be undervalued or going through financial difficulties, creating the possibility of significant appreciation once improvements are made or underlying issues are resolved.
Key aspects to consider
The main characteristics of the opportunistic strategy include:
- High risk and high return: Investors take on significant risks, such as buying distressed properties, asset restructuring, or developing land without infrastructure.
- Active intervention: Opportunistic projects often require active management, such as extensive renovations, management changes, or even reconfiguring the rental strategy.
- Opportunities in undervalued markets: These investments can take advantage of market imbalances, such as economic crises, changes in government policies, or fluctuations in real estate demand.
Compared to the core and core-plus strategies, the opportunistic strategy is much riskier, as it relies on unpredictable factors and requires active and expert intervention to manage risks. However, in return for these risks, investors can achieve significantly higher returns, especially when the project is successfully executed.
This strategy is suitable for investors with a high-risk profile, looking to maximize their returns by identifying and exploiting unique opportunities in the real estate market.