AbstractThe initial investment decision-making of the real estate project is very important. It requires making the right assessment of engineering project risk, then judging the project potential value which is affected by the risk factors. Within this context, fuzzy mathematics is used to assess the levels of income risk and cost risk in the real estate investment, and then adjust the relevant parameters of fuzzy real option based on the above risk assessment of real estate project, which will improve the rationality and validity of the engineering potential value evaluation. Finally, this paper illustrates the assessment model with an example of a real estate investment project in Hangzhou.