Ep 247 - Due Diligence Red Flags That Kill Development Deals

There is an old saying in property development: the best deals you ever do are often the ones you walk away from. But how do you know when a problem is a minor hurdle, and when it is a complete deal killer? In this episode of the Property Mastermind Podcast, Hilary Saxton and Bob Anderson dive into the critical "Due Diligence Red Flags" that can destroy a property development deal. Using Bob's "traffic light" system, they explain how to identify a hard red light (like an un-fillable flood zone) versus an amber light (like an overland flow path) that can be turned green with clever design. From spotting dodgy sellers who use cheap conveyancers to unearthing million-dollar stormwater pipe issues, Bob shares the hard-earned lessons from his 40-year career. If you want to know when to hold 'em and when to fold 'em, this episode is your ultimate guide to due diligence survival. 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 Highlights01:47 - Bob's Tip of the Week: A close call with a sudden downpour reminds us that saving the day sometimes just requires a quick phone call (and a great cleaner to shut the windows!).03:41 - The Quickest Deal Killer: Bob recounts a site visit that looked perfect on the surface, only for a quick online council search to reveal it was 1.8 metres underwater in a flood zone.07:34 - What Happens to Bad Sites? In the case of the flooded block, the previous house fell apart, and the council eventually bought the entire row to turn it into parkland because it was undevelopable.10:21 - The Traffic Light System: Bob explains his due diligence methodology. Red means a potential deal killer, Amber means there might be a solution, and Green means the problem is solved.10:37 - The "Downhill Slope" Red Flag: Why a block that slopes away from the road immediately triggers a red flag regarding gravity-fed sewer and stormwater connections (and how to turn it green by negotiating with neighbours).13:08 - Flooding vs Overland Flow: Understanding the crucial difference between a site that goes underwater during a flood, versus a site that simply experiences temporary "overland flow" during heavy rain (which can often be solved with design).18:19 - Naysayers and Hidden Agendas: Why you should be wary of advice from ill-informed friends, Facebook groups, or overly cautious lawyers who want to avoid any potential liability.19:01 - The Ultimate Consultant: Why a private Town Planner is the most important person on your due diligence team when it comes to securing council approvals.26:34 - A 400-Lot Disaster: Bob shares a story from his time managing a large development company, where the boss bought a 400-lot site without checking the stormwater capacity, resulting in a massively expensive 1km pipe upgrade.29:22 - Dodgy Sellers: Why Hilary and Bob willingly walked away from a $10,000 due diligence investment because the sellers were disorganised, cheap, and used a conveyancer who couldn't handle a commercial option contract.See omnystudio.com/listener for privacy information.