The 20-Year Partnership Test

Every week, I ask readers the same question: 

“What’s your biggest challenge in CRE right now?” 

It’s how I fill my bucket of ideas for my Sunday Value Builder newsletter.

Last week, one reader’s response stopped me mid-scroll. It was just one word: “Partners.”

I almost brushed it off. Too simple. But then I sat with it.

Partnerships are the most catapulting force in commercial real estate when you find the right match. And they’re weapons of mass destruction when they go off the rails. 

In this article, I’ll show you the filter I use to separate the good partnerships from the ones that will blow up in your face.

Common Denominator

I got confirmation of this from Sanjay, who runs Avestor (a platform for fund managers and capital raisers).

I asked him:

“When you see operators fail, what’s the common denominator?”

His answer? Hands down, partnerships gone bad.

Then I remembered something from a mastermind I attended. 

Gary Keller, the guy who built Keller Williams into a real estate empire, said: 

“It takes 5 minutes to get into a partnership and 10 years to get out.”

That stuck with me. Early in my career, I said yes to everything. Every opportunity. Every handshake. Every “let’s do a deal together.” But only a few of those partnerships actually lasted.

Accepting the End

Here’s what changed everything for me: almost every partnership has a beginning and an end. Very few last longer than you do, and there’s nothing wrong with that!

When you accept that a partnership will eventually end, you start structuring deals differently. You think about the exit before you think about the entry.

You ask:

“If this ends, will it create more value than it takes?”

When you skip that step, one side inevitably feels short-changed on time, effort, or expectations. It makes the whole thing turn sour.

The Filter

This framework also made me pickier on the front end. Now, when a shiny new opportunity comes my way, I run it through one more filter:

Can I see myself working with this person (and enjoying it) for the next 20+ years?

It doesn’t have to last 20 years. But if I can’t even imagine it on day one? That tells me everything.

Let me give you an example. A few years ago, a group approached me with serious capital. More than I’d ever worked with. The shiny object in my brain screamed “Let’s go.”

But when I ran it through the filter (could I see myself with these guys for 20 years?) the answer was crystal clear. There wasn’t enough gold on the entire planet to make me want that relationship long-term!

So I gave them the polite slow-play: “Let’s circle back later this year.” (Which, in my vocabulary, means: “thanks, but no thanks.”)

Right-Brain Magic

Now, I didn’t start here. I’ve had my fair share of pruning the garden: bad fits, misaligned expectations, partnerships I should’ve passed on. But that pain built this filter.

The 20-year test won’t show up in a course or a YouTube video. It’s not science. It’s gut. Right-brain magic. And it’s saved me more than once.

This philosophy extends to how I approach real estate deals. I explore the dynamics of value creation in my piece on small bay industrial investing.

Conclusion

The right partnerships can catapult your CRE business forward, but the wrong ones can destroy it. When you accept that most partnerships will eventually end, you can structure deals that create value even when they do. And when you apply the 20-year test upfront, you protect yourself from relationships that look shiny but feel wrong.

This filter has saved me from partnerships I would have regretted. It’s made me pickier, and that’s been worth more than any amount of capital.

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