I’ve reviewed hundreds of real estate deals over the past years.
Most fail for the same handful of reasons.

The fundamentals that determine whether the deal will even survive.
Here’s the framework I use.

1. Population Growth

If population has been declining for the past 5 years, that’s a red flag.
Real estate appreciation ultimately follows people.

No population growth = limited demand.

One of the first datasets I check is:
• 5-year population trend
• job growth
• migration patterns

If people aren’t moving in, the investment thesis becomes much harder.

2. Supply Pipeline

New construction can quietly change the economics of a deal.

For most assets, I review development activity within a 3–5 mile radius.

Example:
If a market currently has 1,200 units and another 300 units are under construction, that’s a 25% supply increase.
That alone can reduce occupancy by 5–10%.

Which means:
— NOI drops.
— Cash flow drops.
— Returns change quickly.

3. Insurance Trends

Insurance has become one of the most unpredictable variables in real estate.
Two properties that look identical on paper can have drastically different premiums.

Things I always check:
• Flood zone status
• Loss runs from previous owners
• Local insurance market conditions

If a property sits in a floodplain, premiums can easily be 2–3x higher than expected.

A quick call with an insurance broker before underwriting can save a lot of surprises later.

4. Property Tax Reassessment

This is one of the most overlooked risks in underwriting.

Most counties reassess property values every 4–8 years.

If a property sells significantly above the previous assessed value, taxes can jump dramatically.

Example:
Current tax bill: $45k
After reassessment: $95k+

That one line item alone can destroy projected returns.

5. Rent Growth Assumptions

This is where optimism often sneaks into underwriting.

In the current market, rent growth has slowed across many metros.

When I analyze deals, my conservative approach is:
• Year 1: 0% rent growth
• Years 2–5: 1–2% annually

If the deal only works with 8–10% rent growth, the margin for error is too thin.

Real estate deals rarely fail because of the numbers everyone highlights.
They fail because of the assumptions nobody questions.
Underwriting isn’t about proving a deal works.
It’s about understanding how easily it breaks.