Ep 242 - When To Walk Away From A Development Deal

Walking away from a property development deal can be incredibly difficult, especially after you have invested significant time, emotion, and money. However, pushing forward with a flawed project or hoping the market will miraculously save your margins is a recipe for disaster. In this episode of the Property Mastermind Podcast, hosts Hilary Saxton and Bob Anderson discuss exactly when and why you need to walk away from a deal. Drawing on real-life examples, including a "shonky" industrial site and a joint venture that didn't align with their values , they unpack the dangers of letting emotion override logic. You will learn why "cheap insurance" like flood reports can save you millions , why you must always calculate your feasibility on today's numbers , and how to ensure you always have a contractual "back door" exit strategy before committing.Links Attend the 3 Day Workshop on the Gold Coast: https://bit.ly/3UmDhjo  Chat to Hilary about the current investment opportunity we have: https://link.propertymastermind.com.au/book-a-call Join the Ultra-Urban Database for upcoming investment opportunities: https://bit.ly/45sqO2F Head on over to our website to find out more about our workshop and education options: Our Website Connect with handovers.com: https://handovers.com/ Episode Highlight:01:59 - Bob's Tip of the Week: Dress for the weather! A lesson learned the hard way after a freezing, rainy walk following a wedding in Queenstown, New Zealand.03:17 - The sunken cost fallacy: Why developers find it so hard to walk away after investing time and emotion into finding a site.06:20 - The "Hope Strategy": A cautionary tale of a developer who bought an 11% margin deal, hoping the market would lift it to the bank's required 15% (it didn't).10:28 - Emotion vs Logic: How desperation causes developers to doctor their feasibility numbers, falsely inflating sale prices or artificially underestimating build costs.14:42 - The "Field of Dreams" myth: Why "build it and they will come" does not work in property. You must research what the market actually demands.16:44 - Managing time delays: How unexpected council holdups erode your profits through accumulated interest holding costs.18:15 - Big developers make big mistakes: Bob shares a story of a 400-lot subdivision error that required a massive 1-kilometre stormwater pipe.20:22 - The "Shonky" Sellers: Why Hilary and Bob walked away from a $10,000 due diligence investment because the sellers and their conveyancers were dodgy.23:26 - Cheap Insurance: How a $4,000 flood assessment report saved Bob from a disastrous 22-townhouse overland flow nightmare.24:12 - Walking away from people: The story of Mint Developments walking away from a joint venture partner over misaligned ethics and values.27:02 - The ultimate safety net: Always ensure you have a "back door" (like a due diligence clause) before signing a contract.See omnystudio.com/listener for privacy information.