Buy the Problem You Know How to Solve
The best development deals aren't the prettiest properties. They're the ones where you understand exactly what's broken.
People new to real estate development usually start by looking for a great property. Good location, good bones, good story.
After more than twenty years around construction and development, I've come to think that's the wrong first question. The better one is: what's wrong with this deal, and am I the right person to fix it?
Every opportunity is a problem in disguise
If a property were obviously perfect, it would already be priced that way. The upside in development almost always comes from solving something other people walked away from: a tricky site, an outdated layout, a slow approval path, a building nobody wanted to manage.
That's where the value is. It's also where the risk is. The difference between the two is whether you actually understand the problem you're buying.
Know your problem before you fall for the property
Before getting attached to any project, I'd want honest answers to a few questions:
- What exactly is broken? Write it down in one or two sentences. "Needs work" isn't an answer.
- Have I solved this kind of problem before? Or am I about to pay tuition on someone else's timeline and budget?
- What does it cost to find out I'm wrong? Inspections, surveys, and early conversations with the people who approve things are cheap compared to surprises after closing.
- Who on my team owns the hardest part? If the answer is "we'll figure it out," that's the real risk.
If those answers are clear, a messy property can be a great deal. If they're fuzzy, even a beautiful one can sink you.
Experience is a filter, not a guarantee
Growing up on job sites with my dad, a union carpenter, I learned early that the work you understand goes smoother than the work you're guessing at. That hasn't changed.
Experience doesn't make deals risk-free. What it does is help you tell the difference between a problem that's expensive and a problem that's unknown. Expensive problems can be priced and planned. Unknown ones are where projects get into trouble.
The same rule in business
I host Faith, Business & Politics and write about entrepreneurship, and I see this pattern outside real estate too. The strongest businesses tend to pick problems their founders deeply understand, then stay disciplined about not wandering into ones they don't.
Buy the problem you know how to solve. Pass on the rest, even when it's pretty.
