Common Mistakes in Property Value Assessment

How Good Deals Go Bad—And How to Avoid Killing Your Profit Before You Even Start I’ve seen promising real estate deals fall apart—not because the property was wrong, but because the numbers were mistaken. There are a few common mistakes I see investors (even experienced ones) make that quietly destroy a deal's profitability: Underestimating expenses Overestimating timelines Overspending on renovations that don’t move the needle When I analyze a deal today, I’m brutally honest with my numbers. Because what looks like a home run on paper can quickly turn into a money pit if you're not careful. Here are a few hard-earned tips to help you avoid profit killers: 1. Pad your budget. Add a 10–20% buffer for unexpected costs, especially on taxes, insurance, and materials. 2. Control the timeline. Delays drain profit. Set clear expectations with contractors, and hold them to them. 3. Know your holding costs. Every extra month costs you interest, insurance, utilities, and opportunity. 4. Stay cosmetic where possible. Light updates (paint, lighting, fixtures, curb appeal) often bring the highest ROI. 5. Avoid opening up walls unless necessary. That’s where hidden costs (plumbing, electrical, structural) love to live. 6. Don’t overbuild for the market. Renovate to meet buyer/renter expectations—not to impress HGTV. 7. Standardize finishes. Saves money, saves time, and simplifies management across multiple properties. 8. Do a reality check on your numbers. Never fall in love with a deal. Fall in love with the return. 9. Have a “walk-away number.” If it doesn’t hit your metrics, let it go. 10. Keep learning from every deal. Even the tough ones pay dividends in experience. Every dollar you lose to poor planning is a dollar you can’t reinvest. That’s why disciplined budgeting and execution are non-negotiable. What’s one unexpected cost that surprised you on a deal—or one mistake you’ll never make again? Drop it in the comments. Let’s help others avoid it, too.

You don’t lose money in real estate because of bad markets. You lose money because of bad decisions. Most new investors don’t fail because of external factors. They fail because they make predictable mistakes—mistakes that experienced investors know to avoid. 1. Ignoring Cap Rates – Buying a property without understanding its true return. Solution: Always compare cap rates to market averages and your investment goals. 2. Underestimating Operating Expenses – Hidden costs like maintenance, vacancies, and management fees can kill profits. Solution: Budget at least 20-30% of gross income for expenses. 3. Overleveraging – Taking on too much debt with little room for market shifts. Solution: Stress-test your deal with higher interest rates and vacancy assumptions. 4. Skipping Due Diligence – Rushing into deals without inspecting financials, tenants, or property conditions. Solution: Verify everything—leases, expenses, and even zoning laws . 5. Misjudging Market Cycles – Buying at the peak or ignoring economic trends. Solution: Study local supply and demand, interest rates, and future development plans. 6. Emotional Decision-Making – Falling in love with a deal instead of letting numbers guide you. Solution: Stick to your investment criteria and let data drive your choices. 7. Not Having an Exit Strategy – Investing with no clear plan for resale, refinancing, or repositioning. Solution: Always have multiple exit strategies before signing the deal. The best investors don’t guess—they analyze, verify, and plan before they buy. What’s the biggest mistake you’ve made—or almost made—in real estate? 🔃If you found this post helpful, repost it with your network. #realestate #inspiration

The #1 Mistake That Kills Real Estate Deals You think you’ve got your numbers locked in. The purchase price makes sense, the ARV looks solid, and you estimate the rehab at $40,000. The deal seems like a winner. Then the work begins. The contractor starts demo and finds major plumbing issues. The electrical is outdated and needs a full upgrade. City permits take longer than expected, and material costs have gone up since you ran your numbers. That $40,000 rehab? Now it is pushing $65,000. This is the mistake that kills real estate deals. Investors assume their numbers will hold, but surprises always come. They underestimate expenses, leave no room for setbacks, and suddenly, their "great deal" is a financial disaster. I know because I made this mistake early in my career. I scaled too fast, ignored the true cost of ownership, and overleveraged myself. At first, it looked like I was building wealth—20 units, two car washes, even my own home. But in reality, I was sitting on a house of cards. One vacancy here, an unexpected repair there, and everything started crumbling. Properties went into foreclosure. My Infiniti got repossessed. I was evicted from my own home and had to move back in with my parents—into a pink and lavender bedroom. That was my wake-up call. Real estate isn’t just about finding deals. It’s about knowing your numbers and preparing for the unexpected. Here’s how I make sure I never get blindsided again: - Use real cost data from past deals instead of guessing. - Get contractor bids upfront before locking in numbers. - Factor in permits, utilities, and holding costs to avoid surprises. - Always include a contingency buffer because things always cost more than expected. If you are not planning for the unexpected, you are not investing—you are gambling. What’s one mistake that nearly cost you a deal? Drop it in the comments! #RealEstateTips #PropertyInvesting #FixAndFlip #ScalingUp #RehabbingProperties

Multifamily investors need to stop making these mistakes. I have the privilege of seeing a lot of deal flow. Unfortunately, a lot of this deal flow consists of deals that "do not work" for various reasons. Here are the top 3 mistakes I see multifamily investors making over and over: 1️⃣ 𝗜𝗻𝗮𝗽𝗽𝗿𝗼𝗽𝗿𝗶𝗮𝘁𝗲 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗲𝘅𝗽𝗲𝗻𝘀𝗲 𝗮𝘀𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻𝘀 - It is extremely rare for an appraiser or bank to justify an operating expense ratio under 30%. If you are underwriting your deal to anything less than that, your sales price and debt assumptions will be wrong. 2️⃣ 𝗡𝗼𝘁 𝗶𝗻𝗰𝗹𝘂𝗱𝗶𝗻𝗴 𝘃𝗮𝗰𝗮𝗻𝗰𝘆 𝗳𝗮𝗰𝘁𝗼𝗿 - even in new construction, any lender worth its salt is going to include at least 5% vacancy factor due to market vacancy or the regular friction of tenant turnover. 3️⃣ 𝗡𝗼 𝗺𝗮𝗿𝗴𝗶𝗻 𝗳𝗼𝗿 𝗲𝗿𝗿𝗼𝗿 - if you business plan is to hold the assets, and you are relying hitting every single metric as anticipated, and you will not be able to refinance otherwise, you are running with a lot of embedded risk. If your assumptions are off as little as 5%, you may have to come up with liquidity or ask your investors for cash-in when it comes to refinance time. This will kill the returns you promised your investors. I think a lot of these deals were done when conservatism went out the window and money was free, but hopefully we can learn some lessons from this real estate cycle. If you're an owner staring down the barrel of a loan maturity or rate adjustment, we should talk.

COMMON PITFALLS TO AVOID IN MULTIFAMILY... Experience is the best teacher. But if you’d rather not learn through pain, embarrassment, or foreclosure—here are the mistakes others made so you don’t have to. Multifamily investing is like skydiving: exhilarating, potentially profitable, but not something you should do without a parachute—or at least a checklist. Here are some investor mistakes we strongly recommend watching from the sidelines: 🚫 1. Falling in Love With the Deal It’s a property, not a soulmate. Just because it’s “cute” or in your favorite neighborhood doesn’t mean it’s a good investment. The numbers either work, or they don’t. Your feelings are not part of the underwriting. 🧰 2. Underestimating Repairs That leaky roof? It’s not “minor.” That plumbing “just needs a tweak”? It needs a complete overhaul and probably an exorcism. Always assume the renovation budget needs a 20% contingency—because it does. 📉 3. Ignoring Market Fundamentals Buying in a stagnant market just because it’s cheap is like marrying for looks and ignoring the personality. You want population growth, job expansion, and rent demand. Not tumbleweeds and high vacancy rates. 💼 4. Hiring the Wrong Property Manager Your property manager is your boots on the ground. If they’re lazy, shady, or just wildly incompetent, your profits will go poof—while your Google reviews burn. 📊 5. Overleveraging Debt is powerful—until it’s painful. High leverage + unrealistic income projections = crying in Excel. Be conservative, not cocky. Multifamily investing is not immune to mistakes, but if you study others’ bruises, you can skip a few faceplants of your own. #harvestpropertiesgroup #realestateinvesting #passiveincome #viveequity #cashflow #wealth #financialfreedom #vivepropertymanagement #makinmoves #barbaricyawp