3 Surprising Strategies That Few Investors Use - These Make All the Difference in Real Estate

Investing in real estate is often seen as straightforward: find a good deal, buy the property, and collect returns. But the truth is, the most successful investors—especially in multifamily real estate—go beyond the basics. They leverage strategies that are often overlooked or misunderstood, yet these make all the difference between average results and exceptional outcomes.

If you’re an entrepreneurial Limited Partner (LP) with an eye on real estate, here are three surprising things that few investors do but can transform your returns and reduce your risk.

1. Focus on the Exit Before the Entry

Most investors are laser-focused on getting into the deal—acquisition price, cap rate, and initial terms. But here’s the twist: the most critical factor in a real estate investment isn’t how you enter—it’s how you exit.

Savvy investors know that the endgame drives the strategy from day one. Before you even sign the deal, ask these questions:

• Who will buy this property when we’re ready to sell?

• Will it appeal to institutional buyers, or are we aiming for a mom-and-pop buyer?

• What market conditions could affect our ability to sell or refinance?

For example, a value-add multifamily deal might look great on paper, but if it’s in a tertiary market with limited buyer interest, your exit options could be constrained. On the flip side, properties in high-growth secondary markets like Raleigh, NC, or Austin, TX, attract a broad buyer pool, making your exit smoother and potentially more lucrative.

When you start with the exit in mind, you create a roadmap that aligns every decision with your ultimate goal: maximizing returns when it’s time to sell or refinance.

2. Underwrite With a Margin of Safety—Then Stress Test It

Underwriting is the bread and butter of real estate investing, but most investors fail to go deep enough. They look at projected rents, operating expenses, and potential returns—but they rarely stress test their assumptions.

Here’s what the best do differently:

• Factor in the unexpected. What happens if vacancy rates rise to 12% instead of the expected 5%? What if interest rates spike? What if you can’t achieve the projected rent growth?

• Run multiple scenarios. Stress test your deal under conservative, moderate, and aggressive assumptions. If the deal still works under the conservative scenario, you know you’ve got a buffer to weather surprises.

This margin of safety is what protects capital, which is the ultimate priority for any LP. A disciplined, stress-tested underwriting process separates the solid deals from the speculative ones and gives you peace of mind, even in volatile markets.

3. Invest in the Team, Not Just the Deal

Real estate is a people business, and the best investments are often a direct result of the quality of the team managing the asset. Yet too many investors focus solely on the deal metrics, ignoring the crucial question: Is the sponsor capable of executing the plan?

Here’s what to look for:

• Track Record: Has the sponsor successfully completed similar projects?

• Alignment of Incentives: Does the sponsor structure their fees and returns to prioritize LPs? A strong waterfall structure that rewards performance after LPs are paid is a key indicator of alignment.

• Communication and Transparency: Will the sponsor keep you updated on progress, challenges, and performance metrics?

Even the best deal can falter in the hands of an inexperienced or misaligned sponsor. On the flip side, a great team can turn a challenging asset into a success. As an LP, part of your due diligence should be building trust with your sponsor and understanding how their expertise aligns with the deal’s complexity.

Final Thoughts: The Edge is in the Detailsl

Real estate investing is filled with noise, but the most successful LPs know how to focus on the details that truly matter. By thinking through the exit strategy, stress-testing every assumption, and betting on the right team, you’re setting yourself up for success in a way that few others do.

At Ocean Ridge Capital, these principles guide every investment we make. We believe in starting with the end in mind, underwriting with discipline, and delivering with a team that values trust and transparency. These aren’t just tactics—they’re the foundations of exceptional real estate investing.

If you’re ready to go beyond the basics and invest with confidence, let’s talk. Your next great opportunity might be closer than you think.