Here are some key red flags to watch for:🔴 Lack of experience: A borrower without a proven track record in real estate projects may struggle to navigate unexpected challenges.🔴 Overly optimistic projections: Unrealistic ARV (after-repair value) or underestimated rehab costs can signal poor planning—or worse, a lack of transparency.🔴 Incomplete or disorganized documentation: Missing detailed plans, financial statements, or timelines could mean the borrower isn’t ready to execute the project successfully.🔴 Over-leveraged finances: Borrowers with excessive debt or insufficient personal capital invested in the deal could pose a greater risk of default.🔴 Questionable property comps: Overstated market values or inappropriate comparables may mean they’re inflating expectations.As always, thorough due diligence is your best protection.

Lack of home sales?

When things go wrong the “passive investor is helpless to do anything about it; sure he can display his displeasure by emailing the “sponsor/manager”, complaining on BP or Facebook; report his frustration to a governmental agency.  

In my limited experience, HML may not care too much about your credit but they will care about your, presumed, lack of experience.  

Banks are getting tighter and may have unperforming assets, so they are looking at their portfolios and becoming more picky, for lack of a better word.When the economy is ripping, banks loosen criteria.

So yeah, lack of innovation pave's way for consolidation.

The lack of knowledge can get you into trouble.

Some owners would prefer a clearly defined floor even at the cost of not rising to the highest ceiling.While I hate to say it, there are also property owners who lack either the time, knowledge, inclination, or skill to want to manage their property effectively.

Government AgenciesGovernment agencies can also foreclose on properties.

Are you primarily B2B (contracting directly with companies/agencies) or B2C (leasing to individuals/or Airbnb)?