Are Strong Operator Relationships Becoming Better Than Finding the “Perfect” Deal?

Question

One thing I’ve been noticing lately is that a lot of experienced multifamily investors seem to place just as much value on relationships and execution as they do on the actual deal itself.

Good lenders, contractors, property managers, brokers, and local operators seem to make a huge difference in whether a deal performs well long term.

Curious what others think:

In today’s market, how important is having the right team and relationships compared to simply finding a property with good numbers on paper?

Seems like a lot of successful operators are winning because of execution, not just acquisitions.

G. Brian Davis · Answer

I don't think it's an either/or situation. Good numbers get you into a deal, but good execution is often what determines the outcome.

I've seen average deals perform well because the operator had strong lenders, contractors, property managers, and advisors. I've also seen great-looking deals struggle because the execution wasn't there. Especially in today's market, where margins are often tighter, having the right team can make the difference between hitting your projections and missing them.

Mohammed Rahman · Answer

I 100% agree and today’s market is really exposing that even more. Now that things are tighter, operators actually have to operate well. You can’t rely on cheap debt or rapid appreciation to bail out bad management decisions anymore.

I think a lot of newer investors make the mistake of focusing almost entirely on learning how to analyze deals without spending enough time learning how to actually manage the asset after closing.

Buying the property is only one part of the business. Managing tenants, controlling expenses, handling renovations, building the right team, and navigating problems is what really determines long-term performance.

A spreadsheet can tell you if a deal looks good today, but execution is what determines whether it stays a good deal 2 or 3 years from now.

You can get a really "good deal," but if you don’t have the right people and smart operators around you helping ensure long-term performance, then you’re probably just creating future problems for yourself.

That’s why strong operators tend to stand out so much in markets like this.

Stacy Raskin · Answer

Property selection and numbers on deals are important. Equally important or perhaps more important is having a team you can trust depending on the project. Whether that's a contractor, real estate agent or a mortgage broker, it's working with people who are professional, experienced, can be relied on and you don't have to worry about there being follow through on what was discussed. Also, having their industry specific expertise is very helpful as that can open up new opportunities and ways of reaching your real estate investment goals.

Are Strong Operator Relationships Becoming Better Than Finding the “Perfect” Deal?

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