Incentives Don’t Lie, But They Do Distort: Why Smart Investors Verify Everything

Most investors don’t get in trouble because they lacked information.

They get in trouble because the information came from someone with something to gain.

The contractor wants the build (within your imaginary budget).

The broker wants the commission.

The lender needs the loan placed.

The seller wants the highest price. (rarely reasonable)

None of that is unethical. It’s just incentive.

But incentives shape optimism.

When you’re underwriting a deal, every number should survive a source test.

Where did this rent projection come from?

Are those comps closed sales or active listings?

Is that renovation budget detailed or conversational?

Was that “upcoming development” verified through city planning or just mentioned in passing?

Most investors gather information. Very few verify it.

And that’s where margins get blurry and profits turn to pain.

Before capital moves, I look at a deal from the position of someone who doesn’t need it to work. I know passing on 100 okay deals is worth doing just two grand slams.

If it survives conservative comps, realistic build costs, timeline pressure, and softened exit assumptions, then we proceed.

If it only works with perfect execution and optimistic inputs, it’s fragile. If those who are trying to benefit get upset at questions, its telling.

There’s a difference between being excited about a deal and being protected inside one. It's your responsibility to protect yourself.

Neutral analysis isn’t sexy. It doesn’t sell property. It doesn’t close loans just to get it done. It doesn't make you popular.

But it protects capital, integrity, time, and your energy.

And that’s entire point, isn't it?