💥 Reddit Has No IRR Filter—Just Raw Operator Panic I don’t spend much time on Reddit. But when I do, I find more truth than in 20 polished investor updates. Beneath the noise, one message keeps repeating: “We bought deals in 2021–2022 at 4% cap rates. Now they’re worth 6-cap pricing. We’re underwater.” So the options are: Raise rescue capital (i.e., capital calls to existing investors) Recap the deal (cram down the old LPs, new promote to the sponsor) Sell at a loss Or let the lender take it back And everyone’s asking the same question: “Why is it taking so long for the pain to show up?” Here’s the answer— Extend and pretend isn’t just for lenders. It’s the business model for many operators too. Do everything you can to hang on—hope for a Fed bailout, lower rates, tighter cap spreads, and a miracle exit. Because no rational player wants to lock in a loss if they think there’s still a chance to refi or sell out whole. Now toss lenders into the mix: They don’t want to recognize the losses either They’re packaging bad loans with good ones and offloading them quietly We just got pitched a 90% LTV Class C loan… with a personal guarantee (Yes, that was the good part of the bundle.) Meanwhile, interest rate caps are expiring and repurchase costs are up 10x. Operators are running out of cash. Lenders are running out of patience. And the rescue capital? It’s out there—but you have to admit defeat and take wish certificate for your current investors. How long can extend-and-pretend keep the dam from breaking? What does this mean for “distressed” opportunities—if no one’s willing to realize the loss yet? 🔻 This feels less like a reset… and more like a slow bleed. 👉 If you’re seeing the same cracks forming—whether on the debt or equity side—drop a comment or DM. Let’s compare notes.