One of the biggest mistakes I see investors make when underwriting deals?

They’re uncertain about their numbers—where they come from, why they’re used, or where they lead. And that uncertainty? It’s not just a red flag—it’s a risk.

I’ve reviewed countless underwriting models where investors plug in numbers they don’t fully understand. Maybe they copied them from a previous deal. Maybe a broker tossed them in. Or maybe they used a “standard” assumption because that’s just how it’s always been done.

But here’s the truth: if you don’t know exactly where your numbers come from, you can’t trust your underwriting.

And if you can’t trust your underwriting, how can you trust the deal?

Uncertainty = Risk

When your numbers are based on assumptions instead of verification, you’re building on shaky ground. Here’s what that can lead to:

Overpaying for a Property

If your rent growth projections aren’t backed by real market data, you could easily overestimate your future income—and end up paying more than the asset is truly worth.

Underestimating Expenses

Using generic expense ratios instead of actual operating costs might make the deal look better on paper. But when the real costs show up, your margins disappear.

Inaccurate Financing Assumptions

Failing to confirm loan terms with your lender can throw off your entire debt service calculation. A small interest rate change can dramatically affect your cash flow.

False Confidence in a Deal

Your spreadsheet might say the numbers work, but if they’re built on shaky assumptions, the deal could collapse in reality.

Every Number Should Have a Story

Before entering any number into your underwriting model, ask yourself:

Where did this number come from?

Was it from a broker pro forma, real market data, or the property’s actual historicals?

Is it realistic?

What do rent comps say? How do your expense assumptions compare to similar properties?

What happens if I stress-test it?

If rents grow slower than expected or expenses run higher, does the deal still hold up?

If you can’t answer these questions with confidence, you’re not in control of your investment—the numbers are.

Invest with Clarity, Not Guesswork

The best investors don’t just hope the numbers work. They verify them.

They dig into rent comps. They call property managers to confirm expenses. They talk to lenders about realistic terms. They test worst-case scenarios, then decide.

Why? Because confidence in investing doesn’t come from spreadsheets. It comes from knowing your assumptions are solid.

Bottom line: Every number in your model tells a story. If you don’t know the story, the outcome might surprise you—and not in a good way.