The Million Dollar Decisions Property Developers Make (Ep 263)

Uh, you know, when you're buying a site, and I want you to cover off on pe- uh, like the worst decision someone can make is buying the wrong site, and it usually means they've rushed or they've not done enough due diligence.

But why do some developers do that? Why do they jump in and just...

a- and buy the wrong site? What makes people buy the wrong site?

[laughs] Well, I, I guess there's a couple of factors.

One, one is, like you said, rushing in.

Um, I mean, we need to move reasonably quickly in the property development world if there's a good deal, but we need to do it backed by really good intelligence.

And so I guess somebody who might think they know more than what they really know, uh, and, you know, FOMO, fear of missing out.

Mm-hmm.

A combination of that, lack of knowledge, moved too fast, didn't really check everything out.

They could end up with a, what you could call a lemon or, or the wrong site, for sure.

And when you're talking about the wrong site, you're talking about degrees of wrongness.

Yes.

Even though there's no word of wrongness, but-

You can make it

...

I'll make it up, degrees of wrongness.

And, a- and what that means is, um, buying the wrong site, how much is it gonna hurt? Can you recover? Will you ever recover? How do you recover? Um-

I suppose the worst thing would be not getting finance.

When, because then you're just stuck with the site.

Imagine if you've demo'd-

Well, that's one of the things that, that can go wrong if you don't understand how finance works.

Mm.

You know, not getting finance.

But I guess, you know, if you, if you bought a, a site that, that floods and that you can't build on-

Mm