Other place · Original Repewo Game
Real Estate Development Strategy
A three-role real-estate development strategy game with explicit role-to-role negotiations on project type, location, inflation, financing, construction quality and downside decisions.
Writer: Repewo
Your construction company has limited capital and several ways to grow. Which projects should it actually pursue?
Options include renovation, buying and refurbishing small units, compact infill housing, and larger developments. Each path has different land, permit, financing, execution, sales and downside risks.
- The team must choose project type, city/region, land price, financing, inflation assumptions, quality level and exit strategy.
Deadline: Leave with one investable project strategy, one backup strategy, clear stop/go thresholds and a 12-month action plan.
Do not choose from headline profit alone. Every proposal needs evidence, downside risk, cash need and a clear stop/go threshold.
Each role must challenge the others. Anyone presenting a problem must also propose at least one response.
Exactly three players represent management/investment, project development/construction, and market/sales/financing.
Managing Director & Investment Lead
Owns portfolio strategy, risk appetite, project selection, capital allocation and final go/no-go decisions.
- Choose which project types fit the company now.
- Protect liquidity and set stop/go thresholds.
Project Development & Construction Lead
Owns technical feasibility, permits, design, cost planning, procurement, schedule, construction quality and handover risk.
- Separate optimistic assumptions from buildable reality.
- Protect quality while controlling cost and delay.
Market, Sales & Financing Lead
Owns location analysis, demand, pricing, sales/rental strategy, bankability, presales, investor outreach and financing alternatives.
- Test real market absorption and pricing.
- Compare bank debt, presales, investors and public support.
Four strategies are on the table: renovate existing buildings, buy/refurbish small units, build a small infill project, or pursue a larger development.
Small refurbishments are easier to understand but scale less. Larger developments can create more absolute profit but need more capital, approvals and execution capacity. Renovation hides technical surprises; new build hides land and permit risk.
End with two project types worth screening further and one explicit rejection.
Tasks: Compare return potential, equity tied up, duration, permit complexity, construction risk, team capacity and speed of cash recovery. Eliminate at least one option.
Role check-ins
Managing Director & Investment Lead
- For renovation, small-unit refurbishment, infill and a larger new build: which one can our current team execute with the fewest unknowns?
- Maximum equity available: €___
- Maximum acceptable project duration: ___ months
- Maximum cost overrun before stop: ___%
- Expected permit duration for each option
- Main hidden construction risk
- Team/supplier capacity
Final recommendation / output
Manager and Development agree on the two project types that are actually executable now.
- Which of those two project types can turn back into cash fastest if the market weakens?
- Minimum target margin: ___%
- Maximum capital tied up: €___
- Expected sale/rental period
- Target customer
- Price sensitivity and liquidity
Final recommendation / output
Manager chooses one primary project type and one backup, with a reason.
Project Development & Construction Lead
- How much technical uncertainty are you willing to accept in exchange for a higher headline return?
- For each project type: permit complexity, structural unknowns, contractor needs, likely schedule
- Risk limit, equity limit and desired return
Final recommendation / output
Development states which option is realistic now and which option should wait until the company is stronger.
- If I need 4–6 extra months for permits or technical investigation, does the deal still make market sense?
- Likely pre-construction delay
- Technical due-diligence items
- Construction complexity
- Effect on selling period, price and financing
Final recommendation / output
Team records one technical condition that must be satisfied before the project type remains on the shortlist.
Market, Sales & Financing Lead
- Do you want faster capital recycling or higher absolute profit, and what minimum margin must both options meet?
- Demand strength by project type
- Expected selling/rental speed
- Likely buyer/tenant segment
- Required return and maximum capital lock-up
Final recommendation / output
Market/Finance ranks the shortlisted project types by cash-conversion speed.
- Which project type is most likely to suffer a cost surprise that the customer will not pay us back for?
- Achievable price/rent range
- Customer willingness to pay for renovation/new-build quality
- Technical cost risks and likely change orders
Final recommendation / output
Team identifies the project type with the best marketability after technical risk.
The team has four fictional markets and must choose where to focus.
A: expensive metropolitan district, strong demand, high land price, slow permits. B: commuter-belt growth area, medium land price, improving rail access. C: regional city, lower land price, stable demand, moderate vacancy. D: very cheap shrinking market, weak demand and high resale risk.
Choose one preferred market and one backup. State three data points to verify before a land offer.
Tasks: Compare macro and micro location. Do not buy a cheap site just because it is cheap.
Role check-ins
Managing Director & Investment Lead
- If achievable prices are 10% lower than your base case, which city or district still meets our minimum return?
- Minimum return: ___%
- Maximum land budget: €___
- Maximum geographic concentration: ___%
- Verified transaction/rent evidence
- Demand trend
- Vacancy
- Resale liquidity
Final recommendation / output
Manager selects one preferred market and one backup market.
- What is the single site issue that could make the preferred location unbuildable or much more expensive?
- Preferred market and maximum purchase price
- Zoning, utilities, contamination, demolition, access and permit risks
Final recommendation / output
Manager sets three due-diligence conditions before any land offer.
Project Development & Construction Lead
- Is the location premium large enough to compensate for slow permits, difficult access or expensive site preparation?
- Estimated permit lead time
- Site-preparation risks
- Buildability constraints
- Price/rent premium versus alternatives
- Expected absorption
Final recommendation / output
Development and Market agree whether the location premium is justified.
- If the site needs an extra €___ for demolition, utilities or ground works, is it still within our acquisition limit?
- Range of extra site costs
- Earliest realistic construction start
- Maximum all-in acquisition/site budget
Final recommendation / output
Team defines a walk-away price for the site.
Market, Sales & Financing Lead
- Which matters more here: low land price or proven demand and resale liquidity?
- Comparable sale/rent range
- Population/household trend
- Vacancy
- Employment/infrastructure evidence
- Risk appetite and target holding period
Final recommendation / output
Market/Finance recommends the preferred city/district and explains why cheap land alone is not enough.
- What technical or permit factor could erase the apparent land-price advantage?
- Market premium and demand evidence
- Site constraints, likely permit delay, infrastructure/utility cost
Final recommendation / output
Team records one market risk and one technical risk that must be verified before purchase.
The base-case budget looks profitable, but costs and time may move before completion.
Example: land €1.2m, construction €2.0m, soft costs €0.35m, 18-month build, 4% annual construction-cost escalation on unfixed work, 7% contingency. Downside: +8% construction cost, 6-month delay and only +2% selling-price growth.
Record total development cost, required revenue, expected profit, margin on cost and the point where no more capital should be committed.
Tasks: Build base, downside and severe scenarios. Separate nominal price growth from real profitability.
Role check-ins
Managing Director & Investment Lead
- Which cost items are not fixed yet, how much could they rise, and what contingency do you need?
- Maximum total-development-cost: €___
- Minimum margin on cost: ___%
- Escalation-sensitive items
- Base/downside/severe cost totals
- Schedule sensitivity
Final recommendation / output
Manager approves a maximum cost envelope and a stop threshold.
- If construction costs rise 8% but selling prices rise only 2–3%, does the project still meet our hurdle?
- Approved cost envelope and margin target
- Base/downside selling price or rent
- Absorption risk
- Financing impact
Final recommendation / output
Manager records the minimum revenue/rent level required to continue.
Project Development & Construction Lead
- Do you want me to protect schedule with earlier procurement, even if it uses more cash sooner?
- Which packages can be fixed now
- Which remain inflation-exposed
- Effect of early procurement on cash
- Liquidity limit and acceptable trade-off between cash and price certainty
Final recommendation / output
Development chooses which packages should be fixed early and which remain flexible.
- If completion moves six months later, what happens to selling season, financing cost and achievable price?
- Revised completion dates
- Delay-driven site and contractor costs
- Commercial impact of delay
- Additional interest/holding cost
Final recommendation / output
Team records the full financial effect of a six-month delay.
Market, Sales & Financing Lead
- What minimum profit or margin must remain in the downside case before we stop adding capital?
- Base/downside revenue or rent
- Sales pace
- Interest-rate sensitivity
- Minimum margin and stop-loss threshold
Final recommendation / output
Market/Finance states the minimum viable sale price/rent and sales pace.
- Which costs can truly be indexed or fixed, and which ones could still surprise us later?
- Expected market price growth assumptions
- Fixed versus unfixed construction packages
- Contingency need
Final recommendation / output
Team prevents the mistake of assuming property prices automatically keep up with construction inflation.
The project is attractive, but the company cannot finance land and construction entirely from its own cash.
Bank debt is cheaper but may require equity, collateral, presales or guarantees. Presales reduce funding need but create delivery and price-lock risk. Investors reduce cash pressure but share profit/control. Public support should only enter the model after eligibility is confirmed.
Choose a preferred financing stack, fallback financing and a maximum leverage/control limit.
Tasks: Choose a financing stack and the order in which each source is used.
Role check-ins
Managing Director & Investment Lead
- Compare bank debt, presales, investor/JV equity and public support: which is cheapest after guarantees, delay, dilution and loss of control?
- Company equity available: €___
- Maximum acceptable dilution/control loss: ___%
- Indicative bank leverage/rate
- Presale requirement
- Investor return/control terms
- Grant conditions
Final recommendation / output
Manager chooses the primary financing stack and one fallback.
- At which months do we need the biggest cash draw, and could financing conditions delay construction?
- Chosen financing structure
- Land payment, monthly build cash need, contingency timing, drawdown milestones
Final recommendation / output
Manager confirms the financing actually matches project cash flow.
Project Development & Construction Lead
- Will the bank or investor release money early enough for land, mobilization and contractor deposits?
- Construction cash-flow curve
- Critical payment milestones
- Drawdown rules, presale conditions and investor-release conditions
Final recommendation / output
Development identifies any month with a funding gap before construction starts.
- If financing arrives late, what scope or schedule can we postpone without creating expensive rework?
- Critical-path packages and non-deferrable payments
- Liquidity buffer and business priorities
Final recommendation / output
Team defines a cash-shortage contingency plan.
Market, Sales & Financing Lead
- How much profit and control are you prepared to give up to reduce liquidity risk?
- Bank terms
- Investor/JV terms
- Presale assumptions
- Public-support conditions
- Control limit, guarantee limit and company equity
Final recommendation / output
Market/Finance builds the preferred financing stack within management limits.
- Which technical milestones can support bank drawdowns or investor releases without putting the schedule at risk?
- Funding milestones and documentation requirements
- Realistic construction milestones and evidence available
Final recommendation / output
Team aligns financing releases with actual construction progress.
Cost can be cut, but poor quality can destroy margin through defects, delay, warranty claims and weak sales.
The cheapest bid is not automatically the lowest total cost. Robust projects need clear documents, contractor due diligence, inspections at hidden-work stages and documented handover.
Set three non-negotiable quality controls and two safe value-engineering areas.
Tasks: Define minimum quality, procurement approach and inspection gates.
Role check-ins
Managing Director & Investment Lead
- Name three items where cutting cost would create disproportionate defect, warranty or reputation risk.
- Target budget and customer segment
- Three non-negotiable quality items
- Inspection plan
- Contractor-quality risks
Final recommendation / output
Manager approves three quality non-negotiables and two safe value-engineering areas.
- Which quality features will customers actually pay for, and which are over-specification?
- Target price/rent and budget ceiling
- Customer priorities, willingness to pay, effect on sales/rental stability
Final recommendation / output
Manager selects quality upgrades that create commercial value.
Project Development & Construction Lead
- Are you willing to reject the cheapest contractor if their quality control and balance sheet are weaker?
- Tender comparison including price, quality history, capacity and warranty risk
- Maximum acceptable premium for lower execution risk
Final recommendation / output
Development and Manager agree contractor selection criteria beyond price.
- Which visible and hidden quality items matter most to the target buyer or tenant?
- Lifecycle, acoustic, waterproofing, fire-safety and commissioning priorities
- Customer complaints/preferences and market premium
Final recommendation / output
Team connects technical quality controls to actual customer value.
Market, Sales & Financing Lead
- Should we spend more on features that improve saleability/rent stability even if headline margin falls slightly?
- Expected price/rent premium and absorption effect
- Minimum margin and positioning strategy
Final recommendation / output
Market/Finance identifies the quality investments worth paying for.
- Which proposed premium feature adds cost without improving reliability, efficiency or customer willingness to pay?
- Customer priorities and price sensitivity
- Technical lifecycle value and maintenance burden
Final recommendation / output
Team removes at least one over-specified feature.
Three pressures arrive together before completion.
A key trade raises prices, a permit/utility connection is delayed by four months, and buyer demand softens. A private investor offers fresh equity in exchange for a larger profit share.
Choose one immediate action, one fallback and a measurable exit trigger.
Tasks: Recalculate and choose whether to continue, redesign, sell, change exit strategy, add an investor, or stop.
Role check-ins
Managing Director & Investment Lead
- With softer demand, what protects cash fastest: discounting, converting to rental, presales, bulk sale to an investor, or new equity?
- Cash runway: ___ months
- Maximum acceptable loss: €___
- Control limit
- Updated sales/rent pace, investor terms and financing alternatives
Final recommendation / output
Manager chooses one immediate commercial action and one fallback.
- After the four-month delay and cost increase, what is the revised cost-to-complete and what can be simplified safely?
- Cash ceiling and deadline for recovery
- Revised completion date, cost-to-complete, safe scope reductions
Final recommendation / output
Manager sets a measurable exit trigger if cost or time worsens again.
Project Development & Construction Lead
- If we continue, which technical scope must remain protected even under cash pressure?
- Revised cost-to-complete
- Critical quality/safety/permit items
- Available recovery capital and stop threshold
Final recommendation / output
Development locks the minimum safe/compliant scope.
- If we simplify layouts/specification, how much demand or price do we lose?
- Possible scope reductions and savings
- Commercial impact on sales/rent and investor value
Final recommendation / output
Team chooses only scope changes whose savings exceed the commercial damage.
Market, Sales & Financing Lead
- Would you accept lower profit to preserve liquidity, or should we exit and recover capital now?
- Updated sales/rent scenarios
- Investor rescue terms
- Recovery value if sold now
- Acceptable loss, cash runway and strategic priority
Final recommendation / output
Market/Finance recommends continue, restructure or exit with numbers.
- What is the earliest credible completion date after the delay, and what evidence supports it?
- Commercial deadline before another price/rent adjustment is likely
- Revised critical path and remaining technical risks
Final recommendation / output
Team agrees on one revised completion date and one trigger for abandoning it.
The three roles must commit to one project strategy.
Which project should the company pursue now, where, with what financing and what stop/go rules?
The team has converted a list of possible deals into a disciplined development strategy.
A strong result aligns project type, location, acquisition price, inflation-adjusted cost, financing, construction quality, market demand and liquidity. It also defines when not to proceed.
Task 40 · Evidence 35 · Peer 25
Managing Director & Investment Lead
78/100Project Development & Construction Lead
78/100Market, Sales & Financing Lead
78/100The team connected project type, location, inflation-adjusted economics, financing, construction quality and stop/go rules into one coherent strategy.
Which assumption had the greatest effect: land price, sale/rent, cost inflation, financing, permit time or construction quality? What evidence would you collect before committing major capital?