Proceed, pause, or walk away?
Every deal comes down to this. Here's a framework that actually works when the numbers get fuzzy.
Proceed
Numbers hold. Cash flow's positive or comfortably break-even. You've got room for occupancy or rate to dip without the whole thing collapsing.
Next: due diligence. Zoning, HOA rules, local demand, regulatory risk. The analysis says it can work—now confirm the details.
Pause (Borderline)
Cash flow's thin or slightly negative. The deal lives or dies on hitting your assumptions. A weak year? Meaningful stress.
Only proceed if you've got 6–12 months of reserves and can stomach break-even. Otherwise—pass. Find something stronger.
Walk away
The deal fails under conservative assumptions. Revenue vs. costs— gap's too big. Walking away means you're not subsidizing a property or hoping optimistic projections pan out.
Reasonable call. Most disciplined buyers wouldn't take on something that fails under stress-tested numbers.
No hedging
The framework works because it's binary. Every deal gets one verdict. No "it depends." No caveats. You get a clear answer you can act on.