Red flags in a real estate project are not always obvious—but they’re almost always there from the start.
We’ve seen it time and time again: a project that looks fine on paper but unravels in the field. The cause? It’s usually baked in from day one. Here are five early warning signs—and the data behind them—that tell us when trouble’s coming.
1. The Real Estate Project Budget Was Built Before the Drawings
Creating a budget before the design is even halfway baked? It’s like quoting the cost of a house from just a napkin sketch. It might feel productive to get numbers down early, but starting from vague assumptions almost guarantees a disconnect between your financial model and reality.
Only 31% of construction projects come within 10% of their original budget. (Source: KPMG Global Construction Survey 2020)
How Square Edge tackles it:
We don’t estimate in the dark. We perform a thorough drawing review, highlight scope gaps, check for inconsistencies, and loop in qualified estimators to stress-test assumptions. Our job is to make sure the first number is as close to the final number as possible.
2. The Permitting Plan Is a Black Box
If your team can’t articulate exactly what permits are required, who’s reviewing them, and how long each agency typically takes—you’re gambling with your timeline. In some jurisdictions, permit approvals can take months longer than expected, putting your entire construction start at risk.
Permit-related delays can add 3 to 6 months to timelines. (Source: National Association of Home Builders, 2021)
What we do differently:
Square Edge develops a full permitting strategy upfront. We identify every permit type, submission order, reviewer timeline, and conditional approval. Then we monitor the process and work directly with agencies to keep things moving. No assumptions, no black holes.
3. There’s No Contingency Logic
We’ve seen too many budgets padded with a flat 5% contingency, as if all risks are created equal. That kind of thinking may get a line item past the lender—but it won’t protect you when unforeseen costs hit.
75% of construction projects with insufficient contingency planning run over budget. (Source: Rider Levett Bucknall, 2020 Global Construction Cost Report)
Our approach:
We assess risk based on actual project volatility, design status, contract terms, and market conditions. Our contingency is calculated—tied to specific exposures—and constantly reviewed throughout the pre-construction phase. Because true risk management starts before the first shovel hits the dirt.
4. Utility Coordination Isn’t in the Schedule
Here’s a common scenario: your site is prepped, your GC is ready, and then… nothing. You’re waiting for power, water, or telecom. We’ve seen utility lead times stretch 2–6 months—easily enough to derail your schedule.
Utility connection delays average 60 to 180 days, especially in urban infill sites. (Source: U.S. Department of Energy, Energy Infrastructure Report 2020)
How we avoid the stall:
Square Edge engages utility providers early, confirms scope and access, and tracks their milestones against your construction critical path. If something takes six months to deliver, we make sure it starts six months before you need it—not six weeks after you realize it’s missing.
5. One Person Is Managing Everything
We’ve said it before: one project manager, no matter how good, can’t do it all. If that person is managing contracts, budgets, permits, utility coordination, and owner communication alone—important details will get missed.
Projects with undefined or overlapping roles experience a 30% higher rate of failure. (Source: Project Management Institute (PMI), Pulse of the Profession 2020)
How we’re built differently:
At Square Edge, we put an entire team behind each project. That includes schedulers, cost analysts, contract reviewers, compliance experts, and owner reps who specialize in early-phase strategy. We don’t leave execution to chance—or to a single overworked lead.
The biggest budget blowups don’t start with change orders or site delays—they start with the false sense that everything is on track.
By the time most owners realize something’s off, the damage is done. That’s why we focus on front-end discipline. At Square Edge, we help our clients make decisions with full visibility—before the concrete is poured, before the trades mobilize, and long before a spreadsheet turns red.
If you want to protect your bottom line, start by spotting the red flags early. We’ll help you see them. Contact us for a no-obligation call or meeting at (954)294-1540.
Sources:
- KPMG Global Construction Survey 2020 – Building a Technology Advantage
- NAHB – Regulatory Costs in Residential Construction (2021)
- Rider Levett Bucknall – 2020 Global Construction Market Intelligence Report
- U.S. Department of Energy – Energy Infrastructure Permitting Report (2020)
- PMI – Pulse of the Profession Report (2020)