What do you do if your real estate development project is falling behind schedule and going over budget?

1 Assess the situation

The first thing you need to do is to identify the root causes of the problems and quantify their impact on your project. You can use tools such as a project dashboard, a variance analysis, or a risk register to monitor and measure the performance, scope, quality, time, and cost of your project. You should also review your contracts, permits, plans, and specifications to check for any errors, omissions, or changes that may have affected your project.

2 Communicate with stakeholders

The next thing you need to do is to communicate with your stakeholders, such as your investors, lenders, partners, contractors, suppliers, consultants, and customers. You should be transparent and honest about the status of your project and the challenges you are facing. You should also explain what actions you are taking to resolve the issues and what expectations you have from them. You should also listen to their feedback and concerns and try to address them as much as possible.

3 Negotiate with vendors

One of the ways to reduce your costs and improve your schedule is to negotiate with your vendors, such as your contractors, suppliers, and consultants. You can try to renegotiate the terms and conditions of your contracts, such as the scope, price, payment, delivery, quality, and warranty. You can also try to leverage your relationships, referrals, or volume discounts to get better deals. You should also monitor and evaluate the performance of your vendors and hold them accountable for any delays or defects.

5 Adjust your scope

Sometimes, you may need to adjust your scope to fit your budget and schedule. You can try to prioritize your features, functions, or specifications based on their value, feasibility, or demand. You can also try to simplify your design, reduce your size, or change your materials. However, you should be careful not to compromise your quality, safety, or compliance. You should also consult with your stakeholders before making any changes to your scope and document them accordingly.

6 Seek additional funding

If none of the above steps are enough to cover your budget gap, you may need to seek additional funding for your project. You can try to raise more equity from your existing or new investors, or borrow more debt from your existing or new lenders. You can also try to apply for grants, subsidies, or incentives from the government or other organizations. However, you should be aware of the costs, risks, and obligations associated with each option and choose the one that best suits your needs and goals.