The residential and commercial real estate markets have recovered spectacularly since the dark days of the late 2000s. And technology is making it easier than ever to get a real estate loan. But developing and executing an effective real estate investing strategy is as tough as ever.

That’s especially true in the commercial sector, which has a long history of bewildering supposedly savvy investors. As powerful social and technological forces rapidly reorder our built environment and create new challenges for American property investors, the value of strategic thinking has never been clearer.

Sound strategy begins with a sound grasp of the fundamentals. These four major commercial real estate investing strategies account for the lion’s share of activity in the sector, encompassing a wide range of risk tolerances and property types.

Strategy #1: Opportunistic

This is the highest-risk, highest-reward CRE investing strategy. It’s not for the faint of heart. Despite that, Preqin predicted that nearly half of all U.S. CRE investors would pursue an opportunistic strategy in 2016. (No word on how that prediction panned out.)

Opportunistic strategies target “properties that need a significant amount of work—either because of renovation needs, high vacancy, or relative strength of the market,” says Billy Fink of the leasing management platform VTS. “With a typical time horizon of 3–7 years, “opportunism” is a medium-term approach that banks on a turnaround—preferably of the investor’s own making.

Strategy #2: Value-added

Value-added strategies also carry substantial risk. According to Fink, value-added targets include “properties that have significant execution risk to add the necessary value to drive enhanced returns—like major renovation, repositioning, or lease-up to stabilization.” Value-added strategies typically take a full business cycle to execute—time horizons can stretch to or beyond seven years, ideally with substantially increased cash flow on the back end.

Strategy #3: Core-plus

Core-plus strategies target quality properties that present some opportunity to add value with relatively little downside risk. Since core-plus strategies tend to focus on “known quantities” with little execution risk, the potential return isn’t as high as opportunistic or value-added strategies. The upshot: Investors typically don’t have to pony up for major renovation projects or devote lots of energy to addressing pending lease expirations.

Strategy #4: Core

No investment strategy is truly safe, but core offers the lowest risk and lowest return of the four major approaches. Since core strategies focus on prime properties, they’re not at all ideal for investors seeking value opportunities.

Other CRE Investing Strategies

This isn’t an exhaustive list of possible CRE investing strategies. Other strategies include:

Purchasing commercial mortgage-backed securities (CMBs), instruments secured by diversified bundles of commercial mortgages
Directly purchasing distressed properties or distressed collateralized debt at significant discounts to fair market value, a risky but potentially lucrative strategy
Buying into SEC-registered securities issued by real estate investment trusts (REITs) and real estate limited partnerships (RELPs), a common retail investing strategy that doesn’t involve directly purchasing real estate

Seasoned, high-resource investors typically employ multiple CRE investing strategies in tandem to minimize downside risk and maximize returns for themselves or their clients.

Think Twice Before Making a Move

It goes without saying that every CRE investor is different. Before you do anything, think intentionally about your investing objectives, long-term financial goals, overall tolerance for risk, and access to capital. Discuss these and other considerations with your financial adviser—preferably one who’s worked with real estate investors before. And, if you don’t have a seasoned mentor already, find one with an active portfolio in your geographical area.

Preparedness is prevention. The more intentionally you approach your CRE investing plan, the higher your likelihood of success.