The Power of Relationships in Real Estate: A Blueprint for Success

Uncategorized Jun 28, 2024

I want to dive into something incredibly powerful and transformative: relationships. I recently came across an 80-year-long Harvard study that revealed the key to happiness: the depth of our relationships. This insight is not only life-changing but also incredibly relevant to the world of real estate investing.

Real estate is a relationship business at its core. It's not just about the properties, the cash flow, or the deals. It's about the people you connect with, the partnerships you form, and the networks you build. These relationships can make or break your success in this industry. So how do you know which relationships are worth investing in? That’s where the "Three C's" come into play—a concept I learned from the brilliant Beth Clifford, investor and developer.

The Three C's: Character, Commitment, Capacity

  1. Character: First up is character. You need to surround yourself with people of high integrity and strong values. Let me share a story. I partnered with Chris on an apartment building project in Albuquerque. This guy was a former military pilot with an impeccable character. I had watched as he stepped up to manage a troubled property he had been a passive investor in without expecting anything extra in return. He did it because there was a problem that needed to be fixed for himself and his fellow investors and it was simply to do the right thing. That’s the kind of person you want in your corner.

On the other hand, I had another partner who was dishonest from the get-go. She pretended she was just the property manager for a property she actually owned.  She even lied to her employees about who she was, and pointed to me as if I was the owner. I should have seen the red flags. As Maya Angelou said, "When someone shows you who they are, believe them the first time." Character matters, folks. It’s non-negotiable.

  1. Commitment: Next is commitment. This is about dedication to the project and alignment with your mission. You need partners who are as committed as you are. Think about dating—if you're all in and ready to get married, but your partner is still playing the field, it’s not going to work. The same goes for real estate. You need partners who are fully invested in the project and share your vision and values. If you’re dedicated to improving communities, you want someone who shares that commitment. You don’t want to partner with someone just looking to make the most money, even at the expense of others.
  2. Capacity: The last C is capacity. This is all about the ability to do the job well. Ideally, you want to work with people who are at the top of their game and who bring expertise and efficiency to the table. But it's also about complementary skills. You don't need another you; you need someone who excels where you might not. For example, if you’re great at big-picture strategy, find a partner who’s a whiz at the operational details.

Bonus Tip: Fail Small

Here’s a bonus tip from another friend and mentor, Kyle Wilson: fail small. Before jumping into a full-scale partnership, do a small test project together. It’s like dating before committing to a get married. This approach lets you see how well you work together without risking too much. If it doesn't work out, you can part ways without significant loss.

So, lean into relationships. Get out there, attend conferences, join Facebook groups, and network at every opportunity. You never know when or where you’ll meet someone who could become crucial to your real estate journey.

Remember the Three C's—Character, Commitment, Capacity—and apply them to both your personal and professional relationships. And don’t forget – you must embody these qualities yourself to attract and build meaningful, lasting partnerships.

Remember, relationships are the bedrock of success in real estate and in life.

You can watch the whole Getting Real episode about relationships here.

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