The Growth Trap
Growth is exciting. It’s the adrenaline rush of closing on a big deal, the promise of high returns, the thrill of watching your net worth climb. In multifamily real estate, growth typically looks like value-add strategies, new development, or heavy repositioning. Investments that can deliver outsized returns if everything goes according to plan.
But here’s the thing: not everything goes according to plan.
Markets change. Construction delays arise. Debt markets tighten. When you’re fixated solely on growth and chasing returns at any cost, you risk taking on far more exposure than you ever intended. I’ve seen it firsthand, especially over the past 18 months. Sponsors who pushed the limits with overly aggressive underwriting are now dealing with refinancing struggles, capital calls, or even worse.
This is why I believe that every growth strategy must be balanced by a preservation mindset.
The Case for Preservation
At Blue Lake, we protect investor capital by focusing on stable, cash-flowing assets in strong markets with solid fundamentals. We also put a lot of emphasis on conservative underwriting. That’s not just a talking point; it’s how we make decisions. If the numbers don’t work in today’s reality, not in a best-case scenario, we walk away.
We also believe in having strong reserves, fixed debt, and aligned operating partners. These aren’t the flashiest parts of investing, but they’re the things that keep you standing when markets get turbulent.
Preservation is what allows growth to be sustainable. Without it, growth is just gambling with a better pitch deck.
Finding Your Balance
So how do you strike the right balance?
Start by asking yourself: What phase am I in? If you’re just starting out or in expansion mode, you may lean more toward growth, but don’t ignore preservation. Make sure your foundation is strong. If you’re approaching retirement or want to de-risk your portfolio, you may lean more toward preservation, but don’t let fear stall you. There are still opportunities for growth, even within a more cautious framework.
For me, the sweet spot is this: I aim for asymmetric risk. I want to invest in opportunities where the upside significantly outweighs the downside, even when I account for things going wrong. That’s the kind of growth that doesn’t jeopardize preservation, and it’s the kind of strategy I want for my own capital and for my investors.
Final Thoughts
The wealthiest people I know didn’t get there by choosing between growth or preservation. They built wealth by understanding when to lean into each, and by surrounding themselves with people who could help them make smart, strategic decisions along the way.
If you’re feeling the tension between wanting to grow and needing to protect, that’s a good thing. That means you’re thinking like a real investor. And if you’re looking for a partner who values both, we should talk.
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About Ellie Perlman
At Blue Lake Capital, Ellie and her team work exclusively with family offices and accredited investors, offering carefully curated investment opportunities that emphasize long-term wealth creation, stability, and risk-adjusted returns. A defining aspect of Blue Lake’s investment strategy is its integration of advanced AI-driven analytics and data science into the entire lifecycle of acquisitions and asset management. By leveraging cutting-edge technology, the firm executes data-driven forecasting on market trends, asset performance, and tenant behavior, ensuring strategic decision-making and optimized returns.
In addition to leading Blue Lake Capital, Ellie is the original founder and host of "REady2Scale - Real Estate Investing" podcast, which provides insights into multifamily real estate, alternative investments, and finance.
Ellie began her career as a commercial real estate attorney, structuring and negotiating complex transactions for one of Israel’s leading development firms. She later transitioned into property management, overseeing over $100M in assets for Israel’s largest energy company.
Ellie holds a Master’s in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can learn more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.
