When that number gets too high, your pool shrinks fast, even if the rent is competitive.It used to be common to require last month’s rent upfront.

Everyone’s talking about high labor costs, expensive materials, and shrinking margins.

That friction limits buyer pool depth.Financing frictionCertain assets screen poorly for lending:• Mixed use quirks• Low ceiling height• Non conforming units• Tenant issues• Title complexityIf financing is harder, the buyer pool shrinks.

Even a great deal can turn average if it sits too long because the money clock never stops.Leverage matters too, but too much debt can shrink your margin fast if the timeline slips.

Outside of education and healthcare, hiring is shrinking fast.

.• Buyer pool: High HOAs shrink the owner-occupant market, which means you’ll likely compete on price and condition unless demand shifts.• Holding strategy: Some owners in similar situations explore mid-term or furnished rentals to offset carrying costs while waiting for the market.One approach I’ve seen work well is thinking about selling sooner rather than later and using a 1031 exchange to move into a property with stronger cash flow with no HOA.

Investors who’ve actually run the numbers know better too.What makes this niche interesting isn’t just the demand (which is strong), or the margins (which can be excellent), but the control you have over the outcome if you build it the right way.In a phased development model, the biggest value drivers happen long before the first guest checks in:choosing land with the right zoning pathdesigning infrastructure that can scale without reworksequencing buildout so the project pays for its own growthmatching site mix to real demand, not assumptionsbuilding a guest experience that earns repeat stays, not just bookingsOnce those pieces are right, the downside shrinks fast.You’re not relying on one tenant type, one lease structure, or one rent assumption.

Solar panels and the converted garage may shrink your buyer pool, but they usually don’t kill a deal if the price reflects it. 

In some markets, that shrinks the pool more than expected.4.

When you push the down payment to 40–50%, you’re basically forcing the deal to work by shrinking the debt.