Only 4 out of 30 units were rentable.
Pricing out construction and acquisition costs based on hope is the number one deal killer in this business. Not bad markets. Not bad contractors. Hope.
I know someone who bought a 30 unit RV park. Seemed straightforward. Existing operation. Income in place. County showed up after closing and shut down 26 of the 30 units because the well and septic were only permitted for 4. The previous owner had been operating the rest illegally for years.
One phone call to the county before closing would have uncovered it.
Most budget failures are less dramatic but the root cause is identical. Someone priced what they could see and assumed everything they couldn't see was fine.
The permit that triggers mandatory upgrades nobody budgeted for. The soil report that changes the foundation scope. The holding costs that accumulate while you solve problems that weren't in the underwriting. The tiny detail, a permit, a utility size, an easement, a code requirement, that turns a profitable deal into a break even or a loss.
These are not surprises. They are the predictable result of not looking hard enough before you commit.
Price for worst case. Not because every deal goes wrong. Because when something goes wrong on a deal you priced for best case the gap between what you budgeted and what it actually costs comes directly out of your return.
What does your current underwriting process actually verify before you lock in a number?