Picture two companies buying the same kind of building, in the same city, in the same month, with the same kind of loan. On paper, the two deals look identical.

Five years later, they are not.

One has beaten its plan and paid investors back with a profit. The other is in special servicing, which means the loan is in trouble and has been handed to a servicer that deals with problem loans.

It wasn’t the building

If the building, the city and the loan were the same, they can’t explain the gap. As Tanya Muro writes in The Operator Question, the difference was the people running the deal.

Five years is a long time. Over that stretch, the company running a property makes hundreds of decisions you will never see: how to price units, when to spend on repairs, how to handle a tenant who stops paying, what to do when interest rates move, and what to tell investors when something goes wrong. Those decisions add up. That is why Tanya says the operator, not the property, is the investment.

How to tell them apart before you invest

The two deals’ offering documents might read almost the same. So the question to ask isn’t about the deal. It’s about the people:

What’s the hardest stretch you’ve been through, and what did you do?

Listen for specifics. Which deal, what went wrong, what they changed, and how they kept investors informed. A vague answer, or a quick turn back to projected returns, tells you something too.

For a fuller checklist, see the five traits Tanya uses to judge an operator.

Do you check the deal or the people first?

This post is based on a one-minute video on Tanya Muro’s YouTube channel. For education only, not financial advice.