Why Multifamily Deals Fail After You Close (And How to Prevent It)

Think Multifamily | Mark Kenney

Closing on a multifamily property feels huge—and it is. But here’s the truth most people don’t post on Instagram: Closing isn’t the finish line, it’s the starting gun.

Too many new investors spend months chasing and funding a deal, only to stumble in the one phase that really determines whether the property performs: asset management.

That’s the difference between a deal that compounds wealth and one that bleeds it dry. Let’s walk through the biggest mistakes we see after closing—and how you can avoid making them yourself.

1. You Stop Managing and Start Assuming

💭 The trap: “The property manager (PM) has it handled.”

🔍 Reality: A PM may handle day-to-day, but they’re not responsible for the bigger picture. You are. And without clear direction, you’ll be shocked how little insight you actually get.

How to fix it:

• Require weekly “Monday Morning Reports” and detailed monthly financials with variance notes.
  

• Run weekly ops calls with a set agenda: leasing, maintenance, delinquencies, CapEx.
  

• Track KPIs consistently: collections, lease trade-outs, turn times.
  

📌 Delegation isn’t the same as execution. Don’t assume the plan is running just because someone else is running the property.

2. You Don’t Track What Actually Drives Cash Flow

💸 Big miss: Looking at rent roll totals while ignoring the real drivers of NOI.
Many investors watch top-line income, but miss the spread between what’s billed and what’s collected. That’s where profits evaporate.

What to watch:

• Economic vs. Physical Occupancy: High occupancy means little if tenants aren’t paying.
  

• MTD/YTD budget vs. actuals: Always measure against plan, not just last month.
  

• Delinquency aging: 30, 60, 90+ days behind = lost income, not “slow pay.”
  

✨ Pro tip: If variance explanations don’t clearly state the problem and the fix, push for answers. Every lost dollar here is money you can’t distribute.

3. You Misprice Renewals—and Leave Thousands on the Table

📉 Rookie move: Flat $50 renewal increases across the board.
That ignores what the market will actually pay and locks in long-term tenants at below-market rates.

Smarter play:

• Base renewal pricing on real comps and live leasing activity.
  

• Create internal guardrails: e.g., “No renewal more than $50 below market without AM approval.”
  

• Check competitor pricing monthly to stay aligned.
  

🤓 Renewals are one of the biggest levers you control—don’t waste them on a lazy pricing strategy.

4. You Overlook Small Rent Bumps Hidden in Plain Sight

🛠️ Underused tool: Partial in-unit upgrades.
Think smart thermostats, new fixtures, backsplashes, modern pulls. These smaller touches often justify meaningful rent premiums—without full renovations.

🎯 Quick win: Host “Look & See” events where tenants can tour upgrades and pick packages.

🧮 Even a $50/month premium = $600/year per unit → $8,571 in value at a 7% cap.
Small upgrades = big equity.

5. You Let Staff Shortages Sink Performance

⚠️ Silent killer: Cutting staff to save payroll, then bleeding cash from tenant turnover, bad service, and deferred maintenance.

Staffing rule of thumb:

• 1 leasing agent + 1 maintenance tech per 100 units.
  

• Add more if your property is turn- or work-order heavy.
  

💸 Paying for strong onsite staff will save you multiples in retention, reputation, and speed.

6. You Bleed Through Bad Contracts

📉 Cost leak: Many owners never revisit service contracts—so vendors quietly ratchet up pricing.

How to fix it:

• Review contracts quarterly.
  

• Benchmark rates annually.
  

• Renegotiate after stabilization or major CapEx work.
  

🙅‍♂️ No vendor will voluntarily tell you they’re overcharging you. That’s on you.

7. You Fail to Lead

👀 Hard truth: Asset management isn’t passive. It’s leadership.

Your investors trusted you with capital. Stewardship means showing up:

• Fast, direct communication—especially when things go sideways.
  

• Clear expectations with property management and vendors.
  

• Proactive oversight: anticipating shifts, protecting NOI, staying on budget.
  

👤 You don’t need to micromanage every work order. But you do need to own the role of leader.

Final Thought

Success in multifamily doesn’t come from spreadsheets or closing photos. It comes from the unglamorous work after the ink dries—where accountability, systems, and leadership separate the winners from the “what went wrong” stories.

The good news? You don’t have to learn all this the hard way.

👉 Ready to shortcut the struggle?
Apply for Group or 1-on-1 Coaching with Think Multifamily. We’ll walk through your goals, answer your questions, and help you decide the right next step.

🎯 Apply today → Think Multifamily Coaching

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