When a family office, landowner, or joint venture partner sits down with a real estate developer for the first time, the conversation usually centers on track record and capital. Can they close? Have they built this before? Do they have the money? Those questions matter, but they rarely explain why a partnership falls apart.
Daniel Kaufman, founder of Kaufman & Company, says the deals that struggle most are often the ones where the numbers looked right, and the people did not. His Los Angeles-based holding company spans residential development, workforce housing, AI infrastructure, and venture capital, and he says his team turned down more deals this year than it closed. “Most of these were about culture, personality,” he said.
Here is what he looks for, and what he has learned to walk away from.
Start With the Data, Then Look Past It
Kaufman’s team relies heavily on data. The first filter is simple: does the deal pencil, and does it fit the platform? Only after a project passes that test does the second filter begin, and that is the one he says most developers skip.
“In the past, I’ll be honest, we would do deals with people. Hey, we’re going to make a lot of money. So what if they’re a bad person? So what if they are abrasive? So what if they don’t communicate well?” Kaufman said. “We found that in many of those cases, the project struggled despite the data.”
The lesson is practical. A pro forma assumes the partners will make decisions together for years. If they cannot communicate, respect each other’s process, or share bad news early, the projections stop meaning much. Kaufman & Company’s Greenview Residences case study makes the same point from the execution side, crediting clear communication among the development team, contractors, and stakeholders as a key reason the 350-unit project finished ahead of schedule.
Notice When a Partner Only Asks About Money
On the other side of the table, Kaufman says new partners almost always open with one question: do you really have the money? Proof of capital is a fair request. The problem comes when it is the only thing a partner wants to discuss.
Kaufman says those partners are often in such a rush to confirm funds that they skip the time it takes to understand how the relationship will actually work. Onboarding a new partner is a real investment for his team, from travel and research to the company’s BridgeStar partner portal. “Why would I sit with you if we weren’t going to do the deal?” he said.
For investors and landowners, the takeaway works both ways. If a prospective partner shows little interest in how decisions get made, who handles problems, or how the two sides will communicate, that tells you something about how the next five years will go.
Spend Time Together Before You Sign
Kaufman compares choosing a partner to dating. Someone can look perfect on paper and still be the wrong fit once you meet them in person.
“It is really like dating. People don’t realize that,” he said. That is why he prefers to get to know partners outside the conference room. Dinner, a walk, a ski trip, traveling together, or meeting their family all reveal things a term sheet never will.
This does not mean business becomes personal. Kaufman says he keeps a clear wall between friendship and the deal itself. But knowing who someone is before money changes hands helps both sides avoid a partnership that looks good on paper and fails in practice.
Treat Speed and Overconfidence as Warning Signs
The most common red flag Kaufman sees is urgency. Partners who need capital quickly or want to skip steps tend to create problems later.
“If you’re in a hurry to do a deal, you need our money, and you need it quickly, we’re the wrong partners for you,” he said. He describes his company as the tortoise, not the hare, and points to overconfidence as the trait that sinks most rushed deals. A partner who insists the work can be done in a month, when experience says six months to a year, is signaling how they will handle every timeline that follows.
Kaufman says his team has walked away from deals at the last moment when something raised concern, and he considers that a normal part of the process. His advice to anyone evaluating a partner is to check the numbers first, then give equal weight to how the other side communicates, how patient they are, and whether you want to work with them for the life of the project.
Kaufman & Company is a Los Angeles-based permanent-capital holding company founded by Daniel Kaufman. The platform spans residential development, workforce housing, AI infrastructure, and venture capital across ten operating companies.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.
