Cool prototype. Great pitch. Now sitting in a scrap yard.

[JS Burnett]

I want to share a deal that didn't happen, and why that was the best outcome possible.

Met a guy who wanted to partner on a development project. Invited me to his office where he had a physical prototype of what he was proposing to build. Real unit. You could walk around it. Engineering documents on the table. Location plans. He had a confident answer for every question I raised.

We met multiple times. He came out to one of my properties and we walked the site together talking about building several units there.

It was a serious looking opportunity.

Here is what verification turned up:

The locations we discussed could never have accommodated what he was proposing, based on factors he had specifically told me were already resolved. They were not resolved. They had never been addressed. Several other claims fell apart under basic scrutiny.

A year after our last conversation his prototype is being loaded onto a truck headed for a scrap yard.

For anyone newer to development deals, a physical prototype and a polished pitch are not proof of a viable project. They are a reason to dig harder, not a reason to relax.

The things that kill deals are almost never the things that come up in the pitch meeting. They are the things that get glossed over with a confident answer and never actually verified.

In commercial development you are not trusting people. You are trusting documentation, site conditions, engineering, permits, and facts that exist independent of whoever is sitting across the table from you.

That distinction has saved me more money than I can calculate.

Happy to talk specifics if anyone has a deal they want a second set of eyes on before committing.

Jeph Burnett
Construction Consultant | Houston TX REIGuideService