Navigating the Chicken or the Egg Dilemma in Real Estate

In the multifamily real estate investment space, many aspiring investors hit the same roadblock: you need experience to be awarded deals, but you need deals to gain experience. It’s the classic "chicken or the egg" dilemma, and it can feel like an impossible cycle to break. This is one of the reasons why the barrier to entry in multifamily investing is so high—no one will take you seriously until you’ve built a track record. So how do you get started and close that first deal?

When I first entered the multifamily real estate world, this dilemma was all too familiar. Without a track record of closing deals, gaining the trust of brokers, lenders, and investors was difficult. And rightly so. In this business, no one wants to waste time with people who don’t know what they’re doing. Brokers only want to work with qualified operators because they only get paid if the deal closes. Lenders and investors are rightfully cautious about entrusting their money to someone who’s never operated a large property before. It’s much harder than it looks. When things go sideways (and they will), you need to have the ability to problem-solve and find solutions even when none seem obvious.

So, how do you break through this dilemma?

You definitely don’t break through by rushing to close your first deal before knowing what you’re doing. Taking the time to truly learn the business is essential. This means shadowing and learning from experienced operators who’ve already made mistakes you can avoid. One of the fastest ways to accelerate your knowledge is by partnering with another operator on a deal. By being involved in the transaction, you’ll gain invaluable experience in what it’s really like to own and operate a large apartment building.

But how do you partner with another operator on a deal?

That’s often easier said than done. Unless you’re looking to offer yourself as an unpaid intern, the best way to partner is by providing some form of value. For example, maybe you’ve sourced an off-market deal directly from a seller but don’t know if it’s a good deal or how to proceed if your offer gets accepted. Or maybe you lack the track record for lenders to take you seriously. In cases like these, experienced operators would gladly offer equity and mentorship in exchange for your value—like an exclusive off-market deal. There are other creative ways to provide value to an operator in exchange for equity and experience, but I’ll cover those another time.

Be selective about who you partner with.

Not all operators are created equal. You need to be cautious about who you align with. Even those who appear experienced may not be the right fit. In multifamily real estate, partnerships can last 5 to 7 years or more for just one deal. I’ve seen too many deals fail due to partnership disputes or breakups, which is why choosing the right partner is crucial.

Beware of the “deal junkies.”

Early on, I encountered a certain type of real estate professional I like to call “deal junkies.” These individuals chase deal after deal, focused on increasing their door count—often at the expense of their investors. For them, it’s all about quantity—how fast they can scale and how many units they can add to their portfolio.

But here’s the issue: when your sole focus is on closing deals, you risk losing sight of what’s most important—your investors. 

I saw firsthand how deal junkies would cut corners or fail to fully vet a property just to boost their numbers and add to their door count. They didn’t have the integrity to ask if the deal actually made financial sense? Do we have enough buffers in our underwriting to account for unforeseen expenses? Are we properly calculating rent growth? These critical questions are often overlooked when someone is simply chasing the next deal instead of looking out for their investors’ best interests.

Real estate is a marathon, not a sprint. 

I made a conscious decision early on not to work with “deal junkies.” Instead, I focused on building relationships with like-minded operators—people who have integrity and are willing to put in the hard work to ensure every deal presented to investors is well-vetted and positioned for success.

It’s easy to get caught up in the “door count” or assets under management, but none of that matters if the deals flop. Some of the best decisions we made were the deals we walked away from.

Real estate is a marathon, not a sprint. When you’re starting out, partnering with experienced operators is key. Learn as much as you can from their expertise. Use their knowledge to get your foot in the door and break free from the "chicken or the egg" dilemma.