Developers...scum or poor losers?

[MadDuck]

Today we had an interesting chat around the staff room lunch table. There was an article in the Harold about the developer of Kensington Park (Orewa) that is really upset because the receivers have come in and his family and he will lose everything. Then to top it off the Whisper Cove development has fallen over.

Neither of these failures would be a surprise to someone with half a brain...yep I think I have half of one anyways.

Now most people were shocked when I said I was angry at this guy because his incompetence will take a lot of contractors and their employees down with him. How the hell does someone go into a development with no money (I know I am naive)? Why should anyone feel sorry for him?

[scumdog]

'Developers'?
I feel they are the Jewish money-lenders of the 21st century.
(Mostly)

[idb]

Today we had an interesting chat around the staff room lunch table. There was an article in the Harold about the developer of Kensington Park (Orewa) that is really upset because the receivers have come in and his family and he will lose everything. Then to top it off the Whisper Cove development has fallen over.

Neither of these failures would be a surprise to someone with half a brain...yep I think I have half of one anyways.

Now most people were shocked when I said I was angry at this guy because his incompetence will take a lot of contractors and their employees down with him. How the hell does someone go into a development with no money (I know I am naive)? Why should anyone feel sorry for him?
If it's true that he is going to lose everything, at least he didn't have everything tied up in a trust so that he sits in his flash house while the contractors go under.
That might show integrity...or really bad legal advice.

[Manxman]

Today we had an interesting chat around the staff room lunch table. There was an article in the Harold about the developer of Kensington Park (Orewa) that is really upset because the receivers have come in and his family and he will lose everything. Then to top it off the Whisper Cove development has fallen over.

Neither of these failures would be a surprise to someone with half a brain...yep I think I have half of one anyways.

Now most people were shocked when I said I was angry at this guy because his incompetence will take a lot of contractors and their employees down with him. How the hell does someone go into a development with no money (I know I am naive)? Why should anyone feel sorry for him?

Agree. He wouldna been complaining if the development had happened two years ago and he'd made a couple of million out of it, eh? He should take responsibility for his actions and/or grow some kahunas.

[Hitcher]

Live by the sword, die by the sword. So what if he's put his own money at risk. I feel more sorry for all of the contractors, subbies and suppliers he is going to leave out of pocket and people who have trusted him to complete houses for them to live in. He's overextended himself financially and used other people as his creditors. Good old fashioned greed at work. BlueChip but on a smaller scale.

[MadDuck]

Good old fashioned greed at work.
Yep. That about sums it up.

[jafar]

Live by the sword, die by the sword. So what if he's put his own money at risk. I feel more sorry for all of the contractors, subbies and suppliers he is going to leave out of pocket and people who have trusted him to complete houses for them to live in. He's overextended himself financially and used other people as his creditors. Good old fashioned greed at work. BlueChip but on a smaller scale.

The Capitalist system at work, some win, some don't...... life is a shit sandwich, the more bread you have the less shit you eat:eek5:

[Flatcap]

If he hasn't partitioned off his personal assets in trusts, then greed must have been less of a motivator. He must have totally backed himself to make it happen.

Either that or he is an idiot

[jrandom]

Live by the sword, die by the sword.

Precisely.

'Property developers' roll big dice for big returns. I have absolutely no sympathy for the snivelling wretch reported on in the Harold.

The schadenfreude of watching speculators crash and burn during recessions is one of the few tasty treats left for those of us at the bottom of the pile who do our best to pay the bills by creating real economic value.

[idb]

If he hasn't partitioned off his personal assets in trusts, then greed must have been less of a motivator. He must have totally backed himself to make it happen.

Either that or he is an idiot

man, you said it way better!!!

[Pedrostt500]

Most developers Ive meet have been blood suckers, they would rather send their subbies to the wall than fall on their own sword.

[MadDuck]

Actually personally I think he is an idiot.

Are there any financial people out there (apart from me) that can tell me how someone rocks up to a finance company and has no money but gets provisional funding for a multi million dollar development?

[idb]

Actually personally I think he is an idiot.

Are there any financial people out there (apart from me) that can tell me how someone rocks up to a finance company and has no money but gets provisional funding for a multi million dollar development?

Does that make him the idiot, or the finance company?

[scumdog]

We are all greedy people, ya gott agree eh? - but these developers have taken greed to a stratospherical level...

[MadDuck]

Does that make him the idiot, or the finance company?

Hmm good point. The two developments I refer too I (personally) think were way too big for the region at this point in time. Given that Rodney District Council is one of the most anal Councils to deal with they were destined to fail.

[jafar]

Does that make him the idiot, or the finance company?

$1.00 each way on that one:shutup:

[Hitcher]

We are all greedy people, ya gott agree eh? - but these developers have taken greed to a stratospherical level...

Even worse, in cohorts with their corrupt valuation and real estate mates, they drive the cost of residential property beyond the reach of many New Zealand families.

[smoky]

If it's true that he is going to lose everything, at least he didn't have everything tied up in a trust so that he sits in his flash house while the contractors go under.
That might show integrity...or really bad legal advice.

personal assets in trusts is not as much protection as you imagine

[1 Free Man]

Today we had an interesting chat around the staff room lunch table. There was an article in the Harold about the developer of Kensington Park (Orewa) that is really upset because the receivers have come in and his family and he will lose everything. Then to top it off the Whisper Cove development has fallen over.

Neither of these failures would be a surprise to someone with half a brain...yep I think I have half of one anyways.

Now most people were shocked when I said I was angry at this guy because his incompetence will take a lot of contractors and their employees down with him. How the hell does someone go into a development with no money (I know I am naive)? Why should anyone feel sorry for him?
:weep: Yes doesn't it bring a tear to your eye to think this poor guy has gone into something like this with little or no money up front and now it's all turned to shit he wants the world to weep with him.
Well sorry buddy you don't get a sympathy vote from me that's for sure.!!!
Pricks like this guy are the scum of the earth to my way of thinking.
I have been a contract Electrician in a former life and have suffered the pain of being taken down by one of these pricks.
The fuck that took me down was ordering up extra's on the developement up to and including the day he went down the tube. It was as if he had decided that If he was going to go to the wall then everyone around him was going to go with him.
The shit didn't break me but it took a long time to recover.

[MadDuck]

personal assets in trusts is not as much protection as you imagine

No but it takes a lot of money and expertise to get at them. Unfortunately the average contractor (subbie) does not have the financial ability or knowledge to do this so the larger suppliers will get in frist.

[alanzs]

If it's true that he is going to lose everything, at least he didn't have everything tied up in a trust so that he sits in his flash house while the contractors go under.
That might show integrity...or really bad legal advice.

Bad legal advice. :rolleyes:

[smoky]

No but it takes a lot of money and expertise to get at them. Unfortunately the average contractor (subbie) does not have the financial ability or knowledge to do this so the larger suppliers will get in frist.

Receivership/bankruptcy of large companies and developers is just a way to nationalise corporate debt

[MadDuck]

Receivership/bankruptcy of large companies and developers is just a way to nationalise corporate debt

I guess when you work for a company that can afford to take them down it sometimes is worth the expense.

PS: the views expressed here are purely my own and nothing to do with my employer

[Timber020]

I have worked for quite a few developers, and every one of them was a corner cutting, greedy, short sighted, slow to no paying, corrupt, dishonest rat. This includes close family friends who I have known my whole life.

I have yet to come across one that cares anything about what they are doing as long as they
1)make as much money as possible
2)make as much money as possible.
3)flee the scene with as much money as possible.

When they dont pay your often wasting your time dealing with them, they treat it like its part of the game, but annoy his wife by dumping tonnes of tree stumps, mulch, logs and broken concrete in there driveway a few hours before shes having a big flash birthday party, money appears REAL fast. AND they will pay extra to clear it up!

There are alot of way to get to them, some of the guys I have worked around have done some classics.
One has little kids and when they wake up in the middle of the night he calls people that owe him money, if that doesnt work he rings other members of the developers family. The funny thing is that he owes ME money at the moment!
One had some of his guys follow the developer and when the developer parked his car they put up scaffolding around his car with a plywood sign asking to be paid.

I know of a few other things that were a little extreme but got results.

[scumdog]

When they dont pay your often wasting your time dealing with them, they treat it like its part of the game, but annoy his wife by dumping tonnes of tree stumps, mulch, logs and broken concrete in there driveway a few hours before shes having a big flash birthday party, money appears REAL fast. AND they will pay extra to clear it up!

And you stopped there?

You are way more soft than I thought!!:shutup:

[MadDuck]

but annoy his wife by dumping tonnes of tree stumps, mulch, logs and broken concrete in there driveway

Had a customer offer to do that for me once and though I would love to say yes.....

[Timber020]

And you stopped there?

You are way more soft than I thought!!:shutup:

Ah its progression, only go as far as you need to get results. We had a pretty good plan if that wasnt enough. We were going to fill 1/3 of a truck with mulch, then chip a few dead goats then fill the rest with mulch. (although we would have to freeze them first to chip them) Leave to season (but would not stink out the truck due to goat being in middle of mulch) and then dump that. We were just a little dissapointed that we didnt get to do it.

I am soft, but im an insomniac so have plenty of plotting and planning time on the very very rare occation when people screw with me!

If you need any suggestions, let me know.

[Bullitt]

After some of the property developers Ive dealt with through work I have absolutely no sympathy for him...

[MadDuck]

After some of the property developers Ive dealt with through work I have absolutely no sympathy for him...

So how come they get people to keep working for them?

[The Stranger]

Unfortunately the average contractor (subbie) does not have the financial ability or knowledge to do this so the larger suppliers will get in frist.

Yeah, poor fucken subbies.
Never turn up on time, delay contracts, can't read or understand a contract, always trying to cut corners, moan like fuck when you actually expect them do thier job properly and on time and more of them go through than main contractors leaving the main contractors picking up the tab for the fixed price they supplied.
My heart bleeds.

[Skyryder]

We are all greedy people, ya gott agree eh? - but these developers have taken greed to a stratospherical level...

Yep and those that get there rarely come back to face the music.
They usualy have enough left over to pay their legal bills and continue with their bling bling lifestyle.


Skyyrder

[Timber020]

So how come they get people to keep working for them?

Some find it VERY tough to find guys, I got offered to be paid up front by one that was really deperate. I still turned him down because he was an utter prat.

When your self employed or run a small business unless your phone rings your unemployed without a benefit, guarenteed work for a long period of time can be very tempting.

[idb]

...When your self employed or run a small business unless your phone rings your unemployed without a benefit....

Yep
2345678910

[Bullitt]

So how come they get people to keep working for them?

I didnt say I worked for them...the property developers Ive dealt with in the past would rather have not dealt with me;) Gladly for me Im not involved in that anymore though

[Winston001]

The Capitalist system at work, some win, some don't......

Well.......yes, I'm afraid you are right. That's why a social democracy - which is what NZ and most Western countries have, is preferable to pure capitalism.

I agree with everything said here about developers - scum of the earth.

But...Unpalatable as it sounds, bankruptcies and business failures are part of the price and efficiency of capitalism. As an economic system which rewards risk takers, it encourages innovation. New stuff come from entrepreneurial energy.

When it goes wrong, there is a recycling of expensive stuff through auctions, quick sales etc which has the effect of spreading the risk-takers capital through the community. Of course the risk-taker loses and so do others who have trusted him. However others win by being able to buy equipment, partly built buildings etc at realistic prices.

[scumdog]

Well.......yes, I'm afraid you are right. That's why a social democracy - which is what NZ and most Western countries have, is preferable to pure capitalism.

I agree with everything said here about developers - scum of the earth.

But...Unpalatable as it sounds, bankruptcies and business failures are part of the price and efficiency of capitalism. As an economic system which rewards risk takers, it encourages innovation. New stuff come from entrepreneurial energy.

When it goes wrong, there is a recycling of expensive stuff through auctions, quick sales etc which has the effect of spreading the risk-takers capital through the community. Of course the risk-taker loses and so do others who have trusted him. However others win by being able to buy equipment, partly built buildings etc at realistic prices.

True - but would that those potentially at risk were told they were in that position before they got 'burnt'.

[Winston001]

Are there any financial people out there (apart from me) that can tell me how someone rocks up to a finance company and has no money but gets provisional funding for a multi million dollar development?

I'm no financier but I'll take a stab. Basically no-one can do what you suggest. They start small. Buy a house and subdivide a section, get a taste for it and buy a larger piece of land. Often do it in partnership or with a backer - family, whoever.

Some people really do have a knack for finding a piece of ground at the right price, with a vision for what can be done with it. Timing is critical however. Land values have risen pretty spectacularly in the past 10 years so developers didn't have to be very clever to win. That encouraged them to get bigger and more extravagant........

The finance companies need to lend their money to someone. Car/plasma TVs/furniture is kinda risky but land - now that is gold security. Here - have a million. It works 95% of the time, even when the economy slows down, but when there is a crash......even good lenders and reputable developers go down too.

[scumdog]

I'm no financier but I'll take a stab. Basically no-one can do what you suggest. They start small. Buy a house and subdivide a section, get a taste for it and buy a larger piece of land. Often do it in partnership or with a backer - family, whoever.

Some people really do have a knack for finding a piece of ground at the right price, with a vision for what can be done with it. Timing is critical however. Land values have risen pretty spectacularly in the past 10 years so developers didn't have to be very clever to win. That encouraged them to get bigger and more extravagant........

The finance companies need to lend their money to someone. Car/plasma TVs/furniture is kinda risky but land - now that is gold security. Here - have a million. It works 95% of the time, even when the economy slows down, but when there is a crash......even good lenders and reputable developers go down too.

A good post you coffee drinking tent-occupier but I wish the pitfalls of the above were always explained to those who are encouraged to spend their cach on 'developement', some have no idea of the risk.

[idb]

.....

I agree with everything said here about developers - scum of the earth.

.....

Bullshit.
Everyone makes their money somehow and there are arseholes in every area of endeavour.
I work almost exclusively for developers and there are good and bad.

[Winston001]

True - but would that those potentially at risk were told they were in that position before they got 'burnt'.

Ah yes, that sadly is a basic premise of being in business, being self-employed. It is risky. You are never guaranteed you'll be paid unless you get the money up front.

In theory there are things which suppliers and subbies can do to protect themselves but if they want the work......most just trust the system and largely they are right. If that wasn't true, nobody would ever go into business.

[Winston001]

Bullshit.
Everyone makes their money somehow and there are arseholes in every area of endeavour.
I work almost exclusively for developers and there are good and bad.

I sense.......anger?.....annoyance?.....

Spit it out man, don't hold back. Feel the rage....... :wari:

[scumdog]

Bullshit.
Everyone makes their money somehow and there are arseholes in every area of endeavour.
I work almost exclusively for developers and there are good and bad.

At least the arseholes I meet guarantee my income.

Nice people would end up with redundancy for me.

But you at the 'coal-face' can pick the winners and avoid the losers - and hence guarantee you will lose jack-shit.

[idb]

I sense.......anger?.....annoyance?.....

Spit it out man, don't hold back. Feel the rage....... :wari:

Sauvignon Blanc and mild annoyance at a sweeping statement..and pissed off that I've run out of red (bad planning...bad, bad, bad...!!!).

[Timber020]

Bullshit.
Everyone makes their money somehow and there are arseholes in every area of endeavour.
I work almost exclusively for developers and there are good and bad.

what do you do for them? often depending where you are on the food chain or local conditions depends on how well or badly your treated

[scumdog]

Sauvignon Blanc and mild annoyance at a sweeping statement..and pissed off that I've run out of red (bad planning...bad, bad, bad...!!!).

Go for muscatel in a paper cup... just reeks of class!!:woohoo:

[idb]

At least the arseholes I meet guarantee my income.

Nice people would end up with redundancy for me.

But you at the 'coal-face' can pick the winners and avoid the losers - and hence guarantee you will lose jack-shit.

There are no guarantees I'm afraid, we still make bad calls and as Winston has said, that's the risk of being in business.
You just hope that you manage to avoid too big a hit...we insist on a significant deposit up front in most cases.

[idb]

what do you do for them?

Design and install power supplies.
The best developers are the locals that have been doing it for years, it's a small place here and everyone knows the pricks and the goodies.
The pricks, in the main, struggle to get contractors and pay more when they do.
In fact one local developer, known as a difficult client, went on the front page of the local rag to complain about how tradesmen were ripping off the poor developers and couldn't be relied on to do a good job, just before (weeks before) he started on a multi-million dollar development. He ended up having to start up his own building company to do the job because no one would work for him!

[scumdog]

Ferkin Ducati owners, use to unreliability, 'character' and 'failure to meet expectations'
No wonder your job seems easy!!:crazy:

[idb]

Ferkin Ducati owners, use to unreliability, 'character' and 'failure to meet expectations'
No wonder your job seems easy!!:crazy:

At least if the bike breaks down I can kick the shit out of it...very therapeutic after some days at work...

[scumdog]

At least if the bike breaks down I can kick the shit out of it...very therapeutic after some days at work...

Ya got me!!

MY 'subjects' kinda 'object' if I treat them the same way - in fact some have been known to scream a bit. (bloody blouses)

[RantyDave]

Nice people would end up with redundancy for me.
But face it, having to look for another job would be a small price to pay if the world became suddenly devoid of arseholes. Sadly I think your job security is actually very good.

Dave

[alanzs]

Ya got me!!

MY 'subjects' kinda 'object' if I treat them the same way - in fact some have been known to scream a bit. (bloody blouses)

Don't worry, we won't tell... :2thumbsup

[The Pastor]

no one knows the whole story, lots of things can happen to a project to cause it to fail, and they dont even have to be large ones.

maybe his site when digging found some grave or somthing - say good bye to working that week/month :D all those machines sitting around all day $$$$

but whats real bad is the intrest they get charged every day its overdue!

[Timber020]

Design and install power supplies.
The best developers are the locals that have been doing it for years, it's a small place here and everyone knows the pricks and the goodies.
The pricks, in the main, struggle to get contractors and pay more when they do.
In fact one local developer, known as a difficult client, went on the front page of the local rag to complain about how tradesmen were ripping off the poor developers and couldn't be relied on to do a good job, just before (weeks before) he started on a multi-million dollar development. He ended up having to start up his own building company to do the job because no one would work for him!


There are alot of developers around wellington, its hard to keep up with who are scum and who are lesser scum. Developers come and go, different names, different developments, same sort of dickheads running the show. I stand by what I say about every one of them I have met or worked for here. Developers are corrupt lying get-money-no-matter-what rats. The crap I know thats gone on just sickens me.

[Brett]

Having worked as Project Manager for developers (some very very large investement fund ones) and been a developer on a small scale myself, I have to dissagree with some of the statements made here.
Firstly, let me start by saying that it is one of my personal pet hates when a developer goes down and takes down numerous contractors, small and big, with him. That is pure and simply poor cashflow management and/or greed. Thinking that something was going to come along at the 11th hour and save the developers sorry arse. 70% of the work in property developement (any development for that matter, be it product, systems etc.) is in the frontend. In the design, the structuring of the project, the construction economics and in particular the funding and the contracts. Do this right, and yoru only headaches during construction will be monioring cashflow and contractors...and changing govt legislation. Maybe this is a little over simplified, but I hope you get the drift.
I have met quite a few developers who are absolute arseholes that will screw even a friend over at the drop of the hat for a small return.
I have also met some very good developers, particularly in the commercial sector, who are providing new facilities and infrastructure that are of huge benefit to their clients. Sometimes the client is a private organisation, sometimes they are us, the public.
A good developer will take all environmental factors into account when designing and planning the project to ensure that the building they are to produce will enhance the local area. They will seek funding that is solid, well organised and they will investigate and lock down costs as vigorously as possible. Then they will (usually their PCG team) monitor the project to ensure it goes ahead as planned.

Unfortuanately, there have been many developers caught out in the latest credit crunch. Remember, developers are clients of the funding lenders too. WHen the financier falls over, it has implication for the developer also. A project steaming along perfectly fine can find themself screwed because they suddenly are unable to drAw upon funds to carry on with the project. Thus, time catches up on them and they are caught with their willies out.

A good developer is a good asset. Like it or not, construction is a strong driving force in the NZ economy, and developers are the ones who seek the opportunities that promote this construction.

However, some need to find a bit of a moral compass.

[JimO]

its not only developers thet go belly up owing millions, builders get to do it as well and the latest craze of people getting housing franchise companys to build their houses, how many of them go belly up, I could probably name a dozen in Otago in the last few years

[Brett]

One other little rant of mine...WHY OH WHY do people cry and moan when a development company, usually listed or offering some form of term investment, goes under and the investors loose their money? I mean, comeon...it is property development, there are risks associated. Yes, some of the companies have been incredibly devious in their accounting and the portrayal of investment stability and returns and this does need to be sorted out. A bit more transparity would be a good thing.
However, if you don't like the thought of loosing your investment, stay the hell out of the property market and also the sharemarket. They are both fun and offer good returns when done properly, and yes....when the wind is in your sails. Even a very solid development in a bad market can go belly up. Don't like risks...put your money in the bank and get interest, because investment offers a return because it carries a risk.

[terbang]

Where is Finn when we need him most..?

[Swoop]

When they dont pay your often wasting your time dealing with them, they treat it like its part of the game, but annoy his wife by dumping tonnes of tree stumps, mulch, logs and broken concrete in there driveway a few hours before shes having a big flash birthday party, money appears REAL fast. AND they will pay extra to clear it up!
A mate of mine has had "issues" in the past with developers. He states (in writing) at the beginning of the contract, that items that he has made will remain HIS property untill full and final payment has been received (regardless of whether the item/s are fixed in place on-site).
Previous problem clients have had to be visited on-site to uplift a cheque.
Other times he has a very simple method...
A long-bar chainsaw with an old, but very sharp, blade...
Leaving the site with his property back on his ute and the developer with a fucking big ragged hole in his building, studs and lintels all chopped through.

Quite simple and also quite effective. Dunno why?:woohoo:

[Oakie]

My step-brother is a developer. Big time! He did a few sub-divisions and is now doing a whole town...'Pegasus' north of Amberley. Went into it with solid financial backing and has maintained a good cash flow through making development expenses match sales revenue. Has also tried to keep the locals and the local iwi onside. Things seems to be tracking well there and the first people moved in last weekend I beleive. Huge undertaking which would scare me shitless.

[JimO]

A mate of mine has had "issues" in the past with developers. He states (in writing) at the beginning of the contract, that items that he has made will remain HIS property untill full and final payment has been received (regardless of whether the item/s are fixed in place on-site).
Previous problem clients have had to be visited on-site to uplift a cheque.
Other times he has a very simple method...
A long-bar chainsaw with an old, but very sharp, blade...
Leaving the site with his property back on his ute and the developer with a fucking big ragged hole in his building, studs and lintels all chopped through.

Quite simple and also quite effective. Dunno why?:woohoo:

i think you will find thet legally once its fitted in the building you cant remove it

[Boob Johnson]

Precisely.

'Property developers' roll big dice for big returns. I have absolutely no sympathy for the snivelling wretch reported on in the Harold.

The schadenfreude of watching speculators crash and burn during recessions is one of the few tasty treats left for those of us at the bottom of the pile who do our best to pay the bills by creating real economic value.
Not sure what all the fuss is about with this chap, if anything feel sorry for him, he backed himself, hasn't hidden assets in trusts (which are not always the last bastion of financial security btw). Property Development IS a high risk high return game, he took too greater risk at the wrong end of this cycle (which was a long one as far as property cycles go) & lost out. Hard to lay 100% of the blame on him entirely. He sure as eggs didn't make the financial policy's with which the NZ/Global markets are mis/managed. The some what violent swings in our economies are designed that way for the rich to get richer & the poor to get poorer, simple as that. They don't HAVE to be that way.

As mentioned he could of washed his hands & walked away clean, but he didn't. Some may call him an idiot, some may say well there's a man with honourable intentions that backed himself. Every subbie/contractor etc knows the risks too


The schadenfreude of watching speculators crash and burn during recessions is one of the few tasty treats left for those of us at the bottom of the pile who do our best to pay the bills by creating real economic value.
Building houses provides NO economic value you say???


Stick to tinkering with PC's Dan :rofl:

[Boob Johnson]

I have worked for quite a few developers, and every one of them was a corner cutting, greedy, short sighted, slow to no paying, corrupt, dishonest rat. This includes close family friends who I have known my whole life.

I have yet to come across one that cares anything about what they are doing as long as they
1)make as much money as possible
2)make as much money as possible.
3)flee the scene with as much money as possible.
Again welcome to the REAL world of big business. You guys talk like this is the only industry this type of thing happens in lol.


Wake up :bash:

[The Stranger]

i think you will find thet legally once its fitted in the building you cant remove it

Caution, bush lawyer here.
From memory, the type of clause refered to is valid, however falls over if say an electrician puts such a clause in his quote, the main contractor accepts it, but is working for a client (say the developer).
Should the main contractor or client fall over, the electrician can not rely on his clause.

Though what happens in practice may well be another matter.

[Boob Johnson]

A good post you coffee drinking tent-occupier but I wish the pitfalls of the above were always explained to those who are encouraged to spend their cach on 'development', some have no idea of the risk.
And who's fault would that be? They say a fool and his money soon part aye?


If you go in to something with YOUR eyes shut, then you will HAVE to except whatever the dice land on. There is risk & there is calculated risk, if you don't fully understand the risk's & you still go ahead then you are an idiot in most peoples book. While im not devaluing responsibility away from the developers, you can't & shouldn't expect to have your hand held all the way.


Bullshit.
Everyone makes their money somehow and there are arseholes in every area of endeavour.
I work almost exclusively for developers and there are good and bad.
Oh thank the LORD there are some sensible people in here :innocent:


Ive worked for & with developers & will 100% agree there is good & bad. And like ANY big business, there are sharks & that is a fact, so many getting all bent out of shape about how it works, the majority of doom n gloomers here probably never had anymore responsibility than a 9 to 5.

This guy in question here is interesting because he hasn't protected himself very well, either by design or not, who knows. I would suspect he backed himself in (what was) a bull market. Now some of you here (majority it seems) are calling for his testis to be removed. What would of been worse? This guy having the Dev. in a shelf company, all his assets ring fenced then goes bust leaving the entire debt to sink with the ship? Or taking it on the chin PERSONALLY like he has.

Good ol Kiwi mentality, drag that tall poppy down :weird:




Bet very few of you have the balls or the nouse to do half of what he has

[jrandom]

Building houses provides NO economic value you say???

No, speculation provides no economic value.

Building houses in the hope that somebody will, in future, want to buy them and live in them is speculation.


Again welcome to the REAL world of big business.

Hmm. You're so entranced with the spine-tinglingly exciting idea of being 'wealthy' that you forget the importance of things like honesty and decency.


Stick to tinkering with PC's Dan

Don't call me if your PC's broken; I'm no 'IT guy'. I wouldn't know a cronjob from a corncob.

Regardless of what my actual profession is, though, why would I want to bother myself with it in my own time, when the internet is so full of people with mediocre intellects who don't quite grasp the essence of various matters?

I find slapping those people down infinitely more amusing than bringing my work home with me.

:laugh:

[The Stranger]

No, speculation provides no economic value.

Building houses in the hope that somebody will, in future, want to buy them and live in them is speculation.



But of the many thousands of spec houses built and sold without anyone going bust hasn't the sparky, the plumber the suppliers etc etc benefitted?

PS, I would have to concur with speculation based entirely on the greater fool theory.

[jrandom]

But of the many thousands of spec houses built and sold without anyone going bust hasn't the sparky, the plumber the suppliers etc etc benefitted?

For sure.

I'm trying to look at it at a macro rather than a micro level, though. Certainly no value is created in an economic sense when speculative 'property development' projects are kicked off at the wrong time or in the wrong place.

Which is why I'm saying that the speculation and value-creation are two different things. If people don't rock up wanting to buy the houses, there's no value. It's not until after the project's done that you get to find out for sure whether you might as well have just spent the financier's money on booze and hookers.

Of course, that applies to everything, not just 'property development'. You get to find out whether 'value was created' when a speculative project either makes a profit or goes bust.

I think that the confusion between concepts I'm talking about is at the root of a lot of waste in the world; people fallaciously think "economic value results from doing stuff, I am doing stuff, therefore I am creating economic value".

[Swoop]

i think you will find thet legally once its fitted in the building you cant remove it
As a one-man-band, he honestly couldn't give a fuck.
He does top notch work for some of the best designers in the country... but don't piss him off.:yes:

[JimO]

As a one-man-band, he honestly couldn't give a fuck.
He does top notch work for some of the best designers in the country... but don't piss him off.:yes:

yea but what happens is he (1) doesnt get paid (2) gets to reinstate the bldg at his cost

[Swoop]

yea but what happens is he (1) doesnt get paid (2) gets to reinstate the bldg at his cost
I don't believe that he has had to cross that bridge.
Luckily, now he appears to attract the decent designers. Payment problems have almost disappeared.

[Timber020]

As a one-man-band, he honestly couldn't give a fuck.
He does top notch work for some of the best designers in the country... but don't piss him off.:yes:

Yeah it does happen, legal or not. There was a roofer who turned up to a job with his whole crew of guys (about 10 at the time I think) and said he was there to take the roofing and guttering back on 3 houses.

Fuck legal, the developers have enough time and money to hide behind whats legal while they screw people just legally enough to get away with it. Maybe we have a bad lot of them in wellington. Of over a dozen of them I have worked for or know of only one has been in any way close to being ethical.

[Brett]

A mate of mine has had "issues" in the past with developers. He states (in writing) at the beginning of the contract, that items that he has made will remain HIS property untill full and final payment has been received (regardless of whether the item/s are fixed in place on-site).
Previous problem clients have had to be visited on-site to uplift a cheque.
Other times he has a very simple method...
A long-bar chainsaw with an old, but very sharp, blade...
Leaving the site with his property back on his ute and the developer with a fucking big ragged hole in his building, studs and lintels all chopped through.

Quite simple and also quite effective. Dunno why?:woohoo:

My understanding that under contract law, this is not legal. While I agree with it, and indeed agree that it makes it a helluva lot harder for him to be pushed around, my understanding is that in court he would loose. Sucks, but that is the way the law is set up.
Any lawyers care to counter??

[pete376403]

I'm not a lawyer but I think you're referring to the Romalpa clause which is pretty standard in sales contracts (that I've seen anyway)
http://www.retail.org.nz/downloads/Retail%20Support.pdf

[slowpoke]

I dunno why developers per se are being singled out apart from jealousy/envy which is no more attractive a trait than the greed people seem to have a problem with. Property "speculation" where houses are bought and sat on in the hope that the value rises is one thing but actually developing land and building houses seems to me to be a far more creative endeavour.

I didn't see the report but I take my hat off to anyone who has got the balls to have a go. Whether it works out or not, whether they've made smart decisions or not they have shown more courage than most "employees", me included.

Yep, I hate this stereotyping "developers are scum", "cops are wankers", "motorcyclists are idiots" type shit. We are all individuals and should be treated as such.

You'd be over the moon if someone opened a bike shop just down the road wouldn't you? How is "speculating" that someone wants to buy a motorcycle any different to "speculating" that someone wants to buy a house or section? Taking this one step further, you could open and stock a bike shop in probably a couple of months if you used a pre-existing building so you have a pretty good idea of the economic environment you will be dealing in. Developing say a subdivision could take years when dealing with the various levels of buraucracy so the economic environment is a guess at best. Given that the risks are therefore greater it's only fair that the returns are possibly stellar. The flip side, as this bloke found out, is that failure can be equally spectacular.

[Winston001]

A mate of mine has had "issues" in the past with developers. He states (in writing) at the beginning of the contract, that items that he has made will remain HIS property until full and final payment has been received (regardless of whether the item/s are fixed in place on-site).

Other times he has a very simple method...
A long-bar chainsaw with an old, but very sharp, blade...
Leaving the site with his property back on his ute and the developer with a fucking big ragged hole in his building, studs and lintels all chopped through.

Quite simple and also quite effective. Dunno why?:woohoo:

Its unlawful if the goods are fixed to the building. Once fixed they become attached to the land and the property of the owner and the mortgagee (bank/finance company). There is a case where Westpac obtained a High Court order requiring a builder to replace all the joinery he ripped out. Bloody tough on him but thats the law.

Having said that I've known people to do this and get paid so all power to them. There are some dishonest types out there.

The 'reservation of title" clause is called a Romalpa clause. Its common, it can be effective, and if in business you should use it. The goods remain yours until you are paid in full.

Ok, but nothings easy. Today if you want an effective = lawful and enforceable Romalpa clause, you have to get the buyer to sign a General Security Interest document which you then register with the Personal Property Security Register. Bike dealers have to do this to get stock from their suppliers. Pubs do it to get supplies from the breweries.

Normally large businesses require General Security Interests but the typical small business doesn't. Looks like too much paperwork, they don't really understand it, and if times are good, why bother.....:confused:

[Boob Johnson]

No, speculation provides no economic value.

Building houses in the hope that somebody will, in future, want to buy them and live in them is speculation.
Speculating in the stock market in the hope stocks will rise or fall & spec building a home or two are two radically different things, to even put them side by side is laughable.

We HAVE to have spec builders in NZ because the Govt. doesn't have the $$$ to provide all the housing needed, so to say it provides NO economic value is so ludicrous its laughable, hence why I said stick to tinkering with PC's.




Hmm. You're so entranced with the spine-tinglingly exciting idea of being 'wealthy' that you forget the importance of things like honesty and decency.
Nope, never advocated dishonesty in business nor do I practice it, I absolutely despise it hence why I left my previous profession. I do however have my eyes wide open to how many business people/industries operate dishonestly/unethically. If you operate without this knowledge then you are doomed to be on the wrong end of it.

Im entranced with the spine-tinglingly exciting idea of doing the best you can with what you earn, its not about having the flashiest car/bike/home etc its about being smart & making life easier. People are soooo hedonistic these days, if they can't make themselves feel better by spending money or whatever they feel bad. Well who the hell is really in control of you if thats the case, the body or the brain?


The difference between the wealthy & the not so is simple, its attitude. I find people people who live hand to mouth have very poor attitudes towards money & usually life in general. Coincidence?




Don't call me if your PC's broken; I'm no 'IT guy'. I wouldn't know a cronjob from a corncob.Yes I know what you do for a living Dan, you told me already, twas a very broad sweeping generalisation. The point was stick to what you do best because it quite obviously isn't anything to do with this subject.




Regardless of what my actual profession is, though, the internet is so full of people with mediocre intellects who don't quite grasp the essence of various matters?
Yes it is isn't it :shifty:

[Finn]

Where is Finn when we need him most..?

Sorry. I've been distracted by the financial crisis. Damn well lost the shirt off my back. Lucky I had a few more in the wardrobe eh.

So what do you need my unbiased and completely logical opinion on? Developers? They're all cunts. I've got 2 as friends so it's confirmed.

[jrandom]

Speculating in the stock market in the hope stocks will rise or fall & spec building a home or two are two radically different things...

Perhaps you could explain how this is so.

[Boob Johnson]

Perhaps you could explain how this is so.
Tis already answered above Dan, but something tells me you already knew that <_<

[jrandom]

Tis already answered above Dan, but something tells me you already knew that <_<

Perhaps the problem here is that 'economic value' hasn't been properly defined.

The magical world of the internets provides me with a handy-dandy Adam Smith quote:

There is one sort of labour which adds to the value of the subject upon which it is bestowed; there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour. Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master's profit. The labour of a menial servant, on the contrary, adds to the value of nothing. Though the manufacturer has his wages advanced to him by his master, he, in reality, costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed. But the maintenance of a menial servant never is restored. A man grows rich by employing a multitude of manufacturers; he grows poor by maintaining a multitude of menial servants.

My point here is that one must step back and add another layer of abstraction - even a 'manufacturer' (in this case, a builder) being paid money to do his thing does not create value if nobody wants what is being manufactured.

'Property development' tends to constitute a particularly egregious case of money being flung willy-nilly into activities which may or may not actually be creating anything of real use, in the hopes that the gamble will pay off and the organiser will get to run home giggling with an armful of profits.

I could certainly introduce you to one or two or three gentlemen who are guilty of exactly the same crimes of waste (almost always using the money of over-trusting financiers and/or investors) in the conduct of other businesses. 'Property development' is by no means the sole offender in this regard.

I don't applaud these people when chance and happenstance favours them with profit, and I do not feel sympathy for them when they time their gambles wrong and wind up broke.

[Winston001]

We HAVE to have spec builders in NZ because the Govt. doesn't have the $$$ to provide all the housing needed, so to say it provides NO economic value is so ludicrous its laughable, hence why I said stick to tinkering with PC's.

Yes probably although most builders I know just build houses for owners, not for spec. Spec is an easy way to get burned but I do agree there is no difference between a person building a cluster of houses in the hope they will sell, with another person baking loaves of bread in the hope they will also sell. Its capitalism, small business.


Im entranced with the spine-tinglingly exciting idea of doing the best you can with what you earn, its not about having the flashiest car/bike/home etc its about being smart & making life easier. People are soooo hedonistic these days, if they can't make themselves feel better by spending money or whatever they feel bad. Well who the hell is really in control of you if thats the case, the body or the brain?Well said.



The difference between the wealthy & the not so is simple, its attitude. I find people people who live hand to mouth have very poor attitudes towards money & usually life in general. Coincidence?Certainly attitude is all. The poorest people I have met - in the Sudan, were also the most cheerful and generous. That also goes for some Kiwis including a mate who has zilch. But he's got a job, a lovely lady, an old bike he'll restore and he's happy. Bless him.

[jrandom]

Its capitalism...

That doesn't make it useful. Once again, my point is that just doing shit is not adding value. You have to do the right shit.

Blind 'capitalism' simply for its own sake is destructive.

I have nothing but disapproval for would-be 'capitalists' who indulge their foolish greed for profit and thereby waste society's resources building, baking or growing stuff that simply ends up going to waste (the gentleman mentioned in this thread's first post being a prime example).

Ah well. They'll be first against the wall when the revolution comes...

[Hitcher]

Yes probably although most builders I know just build houses for owners, not for spec. Spec is an easy way to get burned but I do agree there is no difference between a person building a cluster of houses in the hope they will sell, with another person baking loaves of bread in the hope they will also sell. Its capitalism, small business.

I think that there is a big difference. A baker sells their loaves at a price that includes the costs of production and a small margin. Their products are a perishable consumable. They rarely have any negotiating leverage regarding price.

Property developers assume that rising property values will provide them with a margin between the time they start a development and the time that they sell the properties. They use their creditors as their bankers, so offsetting their financial exposure, hopefully to a point where they don't have to pay their development costs until after the property is sold. That's canny business practice, if it's done well.

The practice I find reprehensible is where developers get a "mate" to buy the first property in a development for an overly inflated sum, and then use this as the basis to get "valuers" to price up the remaining properties in the development. They get away with this because of the greed inherent in mortgage lenders who are prepared to condone such practices to make a sale and on the basis that property values will always go up. This is all well and good until they no longer do. The the whole house of cards comes crashing down.

[Winston001]

I think that there is a big difference. A baker sells their loaves at a price that includes the costs of production and a small margin. Their products are a perishable consumable. They rarely have any negotiating leverage regarding price.

Property developers assume that rising property values will provide them with a margin between the time they start a development and the time that they sell the properties. They use their creditors as their bankers, so offsetting their financial exposure, hopefully to a point where they don't have to pay their development costs until after the property is sold. That's canny business practice, if it's done well.

Bakers don't go broke taking the banks money down with them?? :shit: I never knew that.....:eek: In fact I can think of a couple of bread shops which did exactly that.


The practice I find reprehensible is where developers get a "mate" to buy the first property in a development for an overly inflated sum, and then use this as the basis to get "valuers" to price up the remaining properties in the development. They get away with this because of the greed inherent in mortgage lenders who are prepared to condone such practices to make a sale and on the basis that property values will always go up. This is all well and good until they no longer do. The the whole house of cards comes crashing down.

Mmmm......a valuer should be able to look past a single sale, in fact no valuer could reliably assess a house/section simply because a few had been sold at the outset. A jackup by the developer is the first thought he'd have.

As for lenders, the real problem is our banks are peopled by children. A bit of history. After the 1987 crash, we lost a generation of experienced ethical bankers. They were "retired" because the banks lost a lot of money. In their place nice bright-eyed BComs took over, some with MBAs even, and they knew nothing about risk management. Nothing about how to say No to a borrower.

In fact it was/is worse. Salaries depended upon talking people into loans. On top of that, our Labour government wrung its hands and cried about how unaffordable houses were, encouraging the banks to go to 100% lending with Government guarantees.

And here we are today......:no:

[Winston001]

That doesn't make it useful. Once again, my point is that just doing shit is not adding value. You have to do the right shit.

Blind 'capitalism' simply for its own sake is destructive.

I have nothing but disapproval for would-be 'capitalists' who indulge their foolish greed for profit and thereby waste society's resources building, baking or growing stuff that simply ends up going to waste (the gentleman mentioned in this thread's first post being a prime example).

Ah well. They'll be first against the wall when the revolution comes...


I agree that if someone takes a resource and wastes it, that is a net loss to society. But that is unusual.

Capitalism is efficient. It encourages activity for reward. Sometimes there is no reward and the punter loses their effort. However the land/building/ship whatever is generally recycled through sale at a cheap price to another punter so he can have a go. At the "new" price it wasn't possible, but at the second-hand price, he gets a chance. And it might just be the break he needs.

Yes it can be brutal at the individual level but if you take an holistic view, it all works out for society's benefit. If that wasn't true, we'd never have economically survived the great Tulip bubble or the South Seas bubble.

[Boob Johnson]

Perhaps the problem here is that 'economic value' hasn't been properly defined.

The magical world of the internets provides me with a handy-dandy Adam Smith quote:

There is one sort of labour which adds to the value of the subject upon which it is bestowed; there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour. Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master's profit. The labour of a menial servant, on the contrary, adds to the value of nothing. Though the manufacturer has his wages advanced to him by his master, he, in reality, costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed. But the maintenance of a menial servant never is restored. A man grows rich by employing a multitude of manufacturers; he grows poor by maintaining a multitude of menial servants.

My point here is that one must step back and add another layer of abstraction - even a 'manufacturer' (in this case, a builder) being paid money to do his thing does not create value if nobody wants what is being manufactured.

'Property development' tends to constitute a particularly egregious case of money being flung willy-nilly into activities which may or may not actually be creating anything of real use, in the hopes that the gamble will pay off and the organiser will get to run home giggling with an armful of profits.

I could certainly introduce you to one or two or three gentlemen who are guilty of exactly the same crimes of waste (almost always using the money of over-trusting financiers and/or investors) in the conduct of other businesses. 'Property development' is by no means the sole offender in this regard.

I don't applaud these people when chance and happenstance favours them with profit, and I do not feel sympathy for them when they time their gambles wrong and wind up broke.
I knew you had a better attempt in ya than the last :laugh:


Yep Adam Smith, a man ahead of his time for sure, he advocated a free market economy as more productive and more beneficial to society. Im not sure what you quoted from Adam Smith above has anything to do with matter at hand? Although a doozie of a quote :laugh:


I applaud the dev. at Orewa who went under recently because he backed himself & softened the blow as much as possible, can't ask for much more than that. Guys like that don't stay down for long, they came back twice as fast & twice as strong. Without people like him willing to take business risks we would be in a sorry state of affairs.



That doesn't make it useful. Once again, my point is that just doing shit is not adding value. You have to do the right shit.

Blind 'capitalism' simply for its own sake is destructive.

I have nothing but disapproval for would-be 'capitalists' who indulge their foolish greed for profit and thereby waste society's resources building, baking or growing stuff that simply ends up going to waste (the gentleman mentioned in this thread's first post being a prime example).

Ah well. They'll be first against the wall when the revolution comes...
But who says it goes to waste? How many buildings in NZ have "gone to waste" half way through dev. that you know of? Struth even that bloody eye sore on Hobson street got finished eventually, not wasted as you suggest. They are actually building a tangible product, not betting how much stocks will rise or fall in a given period, THATS real speculation, as in trading on then air. Building a house employs trades people far & wide, a vast array of materials natural or otherwise which when combined cost less than the finished product, a house & that IS productive. People were employed to build a tangible & useful product that will last for 100+ years give or take.

[Boob Johnson]

I think that there is a big difference. A baker sells their loaves at a price that includes the costs of production and a small margin. Their products are a perishable consumable. They rarely have any negotiating leverage regarding price.

Property developers assume that rising property values will provide them with a margin between the time they start a development and the time that they sell the properties. They use their creditors as their bankers, so offsetting their financial exposure, hopefully to a point where they don't have to pay their development costs until after the property is sold. That's canny business practice, if it's done well.

The practice I find reprehensible is where developers get a "mate" to buy the first property in a development for an overly inflated sum, and then use this as the basis to get "valuers" to price up the remaining properties in the development. They get away with this because of the greed inherent in mortgage lenders who are prepared to condone such practices to make a sale and on the basis that property values will always go up. This is all well and good until they no longer do. The the whole house of cards comes crashing down.
A baker is providing a service no different to a builder/dev. Someone HAS to do it or we have no houses or sticky buns :laugh:

Property devs. DONT always rely on an upward swing in the market. They build in stages, progress payments is another way or term (not the only one of course). They revalue what they have built at certain stages. This is called progress, ie they are adding value not only to each individual piece of material used as it is now part of a greater object. The banks view each stage as being worth more, no different to a business idea opposed to a business plan, one is now tangible.

And as my good friend Winston has rightly pointed out it can be brutal but thats life as we know it Jim.

[jrandom]

Im not sure what you quoted from Adam Smith above has anything to do with matter at hand?

It was tangentially pointing out that activity undertaken purely for its own sake has no value.


People were employed to build a tangible & useful product that will last for 100+ years give or take.

OK, fair enough. Building houses can add economic value.

The guys who do it are still cunts who often incorporate sharp and dishonest practices in the process, however, tainting whatever theoretical value could be achieved with their greed. Reducing the activities of 'property developers' down to the saintly activity of 'building houses' is a rather disingenuous approach.

[Boob Johnson]

It was tangentially pointing out that activity undertaken purely for its own sake has no value.
Hence why it has nothing to do with building houses




OK, fair enough. Building houses can add economic value.
Sorry just wanted to high light the bit where you agreed with me, it doesn't happen often :laugh:





The guys who do it are still cunts who often incorporate sharp and dishonest practices in the process, however, tainting whatever theoretical value could be achieved with their greed. Reducing the activities of 'property developers' down to the saintly activity of 'building houses' is a rather disingenuous approach.
Yep some are complete bastards but plenty aren't too, thats life/business, welcome to just about every major business in the western world. Its a cut throat world out there but as long as YOU are aware of it then if you are even semi intelligent you won't get into bed with these people unless it is on your terms.


A bird comes along & MURDERS a bug............................for its dinner.


Brutal?

Yep!

Fair?

Well not for the bug! But that's life. If life were a box of fluffies at every turn you wouldn't appreciate the things you do have as much.


As Donald says "don't take it personally, its just business" :laugh:

[vifferman]

Well... some of our developers are a bit weird, perhaps a trifle anti-social, but in the main, they're not bad blokes and blokesses, and produce mostly satisfactory code and applications.