Are “Good Deals” Actually Failing More Often Now?

Question

Curious what others are seeing:

Are deals failing more due to:
• Financing mismatches
• Timeline issues
• Execution problems

Drew Sygit · Answer

"Good Deals" most often fail because they were never a good deal to begin with.

When values & rents were increasing at double-digit percentages, many of these questionable deals were covered up.

2nd biggest issue - newbies being clueless about the business and relying too much on referrals to newbie agents, PMCs, etc. They should be asking MORE questions and learning as much as they can to avoid being taken advantage of.

3rd on the list would be execution problems, typically slow rehabs and slow management.

Hasan Gabareen · Answer

Most good deals I’ve looked at lately aren’t failing because they were bad on paper but rather they’re failing because they weren’t stress tested as systems.

For LTRs and MTRs specifically, I’m seeing three patterns:

- Financing mismatch isn’t just rates — it’s fragility    Deals that barely clear at today’s rate environment break fast with even small shifts being vacancy +2%, rent -5%, minor CapEx. On paper they work, but there’s no legitimate margin of safety.

- Timeline issues become a cash flow timing risk    Especially with MTRs, people underestimate lease-up time and seasonality. A 2 or 3 month          delay in stabilization can wipe out a year’s projected cash flow.

- Execution problems are usually assumption stacking     Optimistic rent + low vacancy + light expenses + smooth management with each one might be reasonable alone, but together they can create a deal that only works in a perfect scenario.

Are “Good Deals” Actually Failing More Often Now?

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