The Two Biggest Threats to Multifamily Syndication Success
By Mark Kenney | Think Multifamily
The Truth About Value-Add Renovations
In multifamily investing, value-add renovations are a major profit lever. But only if they’re executed with discipline. We’ve seen deals that looked amazing on paper fall apart — not because of market shifts, but because construction spiraled out of control.
Budgets were treated like suggestions. Contractors ghosted. Scope creep set in. And returns flatlined.
Here’s what most operators don’t realize:
Poor construction management doesn’t just delay lease-ups. It destroys your NOI which results in a lower value for your property.
Real Stories from the Trenches
We’ve seen deals where:
🔧 Renovation budgets ballooned 30%–50% due to scope creep
🚫 Contractors vanished halfway through a project
⏳ Timelines derailed by delayed materials or lack of oversight
💸 Rent bumps didn’t happen — because units sat unfinished
😬 Investors asked, “Where are the returns?” and got… silence
In these cases, the problem wasn’t the market.
It was mismanaged construction and poor communication.
Construction & Communication: The Two Pillars of Trust
Construction is not something to “wing.” It’s a business line item — and it needs to be managed like one. But even when things don’t go to plan (and they often won’t), smart operators know how to handle investor expectations with proactive, transparent updates.
Bad news is survivable.
No news is not.
Smart Operators Do This:
On Construction:
✅ Create a detailed scope of work — no guessing
✅ Use firm contracts with payment milestones and penalties tied to deliverables
✅ Visit the property regularly
✅ Hold vendors accountable to scope, timeline, and cost
✅ Budget a 20%+ contingency — because something will go wrong
On Investor Communication:
✅ Send monthly updates — even if nothing’s changed
✅ Include status on occupancy, collections, capex, and financials
✅ Acknowledge delays or issues — and explain the plan to fix them
✅ Respond to questions promptly and personally
✅ Don’t let investors find out bad news from someone else
Bottom Line
You can have the best underwriting in the world, but if your renovations fall apart and you ghost your investors, the deal will collapse under the weight of silence and distrust.
At Think Multifamily, we help operators:
Stay disciplined with renovation budgets
Navigate tough updates with confidence
Build investor relationships that last beyond the deal
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