What I Learned After Reviewing 100 Real Estate Deals in 2025
Let me be blunt: most of what I’m seeing on the market right now is trash.
This past month alone, I reviewed 100 real estate deals—and 98 of them were absolutely terrible. Overpriced assets, fake pro formas, and broker fairy tales. If you’re not careful, this market will chew you up and spit you out.
So, in this article, I want to walk you through what I’m actually seeing behind the scenes—from the red flags that disqualify a deal immediately to the very few properties that are still worth pursuing in 2025.
Because if you’re serious about investing in this cycle, you need to understand one thing:
The rules have changed.
The Top Real Estate Underwriting Mistakes in 2025
Here are the three biggest mistakes I keep seeing—and why they’ll kill your returns:
1. Pro Formas Based on Fantasy
If the rent growth projections are based on 2023 comps or some hypothetical future instead of actual in-place rents, walk away. Same goes for underwriting that assumes 2026 refinance plays. You’re just gambling with variables no one can control—especially not interest rates.
2. Understated Expenses
Many deals completely ignore today’s inflationary environment. Property taxes, insurance, labor, and materials are all up. If expenses are magically lower than they should be—or if concessions and delinquencies aren’t factored in—it’s a trap.
3. Old Cap Rates, New Pricing
I’m still seeing sellers anchored to 2021 cap rates. But the market has moved. If the only way a deal makes sense is by assuming you’ll exit at a lower cap rate in the future, that’s not value—that’s make-believe.
What I Am Buying in 2025
Despite the junk, I did find two deals that I liked—and they shared the same characteristics:
-
Mom-and-pop ownership: Self-managed, high-vacancy properties with operational upside.
-
Deferred maintenance: No recent capital improvements, but easy cosmetic fixes.
-
Rents 15–20% below market: Based on what tenants are paying today, not projected futures.
Here’s an example: I recently bought a deal in Arizona where the owner had held it for over 20 years and lived in Florida. It hadn’t been upgraded in years, and rents were well below market. With a little lipstick—paint, roofs, parking lots—we could immediately boost value without relying on aggressive projections.
Where I’m Looking Now
I’m targeting secondary markets that aren’t saturated with institutional capital. When big money chases core markets, yields get compressed. I want the opposite—less competition, more upside.
I’m also looking at land for new construction, but with a twist. Any project started now won’t come online until 2027 or 2028, when new supply will be scarce and rent growth may return. It’s a long game, but one worth planning for.
What I’m Avoiding at All Costs
I walk away from a deal the second I see:
-
Negative leverage on Day 1 (if occupancy can’t cover expenses, it’s a no-go)
-
Bridge debt with no exit plan
-
Aggressive rent growth baked in
-
Syndicators depending on a refi to make a deal cash flow
One deal I passed on was a $40 million property the bank was trying to offload for $14 million. Even at that massive discount, the numbers didn’t work. Just because it’s distressed doesn’t mean it’s a deal.
The Market Is Shifting—Here’s What You Need to Know
While we’re not heading into a 2008 repeat, the fundamentals are changing fast:
-
Cap rates are rising
-
Lenders are finally offloading bad loans
-
Expenses—especially taxes and insurance—are still climbing
We’re entering a period where the only deals that will survive are the ones that cash flow today. Not after a refi. Not after a cap rate compression. Not after rent growth picks back up.
Final Thought: Every Deal Needs a Story That Makes Sense Now
If a deal only pencils out by assuming some magical shift in the market, it’s not a deal—it’s a delusion.
So here’s my advice: stay sharp. Underwrite conservatively. Only pursue opportunities with clear, operational upside—and always assume today’s interest rates, today’s expenses, and today’s rent growth.
Because the investors who thrive in 2025 won’t be the ones chasing fairy tales. They’ll be the ones who saw through the noise and bought based on real numbers—not wishful thinking.
Want Help Spotting Red Flags Before You Invest?
If you’re tired of wasting time on deals that don’t pencil—and you want access to the same tools, analysis frameworks, and deal reviews I use every week—then KenPro is where you need to be.
Inside KenPro, I walk serious investors through real deals in real time—including the ones I pass on and why. You’ll get:
✅ My personal deal review framework
✅ Downloadable underwriting tools
✅ Access to exclusive member-only deal breakdowns
✅ Private Q&A sessions where you can bring your own deals for feedback
✅ Monthly market updates and strategic insights
Don’t guess in this market. Learn how to underwrite like a pro: Join KenPro!
