Posted by If I told you that property investment has the potential to completely destroy lives, what would you think?
Back in 2008, I’d just relocated to Spain and was loving life in my brand new villa. I’d just signed a huge €42 million commercial property deal that was going to make me tens of millions, and I was on top of the world.
Just three years later I was staring at a personal net worth statement of negative €15 million, the banks were forcing me to sell my family home, and my marriage had come to an end.
Over a decade of trying to salvage deals, I learned some brutal lessons. Some cost me hundreds of thousands. One cost me everything. These aren’t just business mistakes – they’re warning signs that, if ignored, can destroy your finances, your health, and your family.
So here are seven red flags I’ve learned to watch for, and why you should ignore them at your peril.
Red Flag #1: The “no-brainer” deal
I once bought a retail property in Dublin with a business partner. We had a tenant lined up, terms agreed that would net us €600k profit. The buying price was €500k, and all of it was borrowed money, zero of our own capital. We literally called it a “no-brainer.”
That “no-brainer” sat empty for 12 years. Total loss.
Why it’s a red flag: If a deal seems too good to be true, it usually is. The easier something appears, the less due diligence people do. “No-brainer” is code for “I haven’t thought this through properly.”
What to do instead: Question everything. The better a deal looks, the harder you should scrutinise it. My business partner and I made a pact: if either of us ever used the phrase “no-brainer” again, the other was allowed to beat them up.
Red Flag #2: Closing before contracts are signed
Still on the Dublin deal, we closed before the tenant signed the lease. The vendor had threatened to pull the deal if we didn’t close by end of week, but we were confident the tenant was committed. After all, they’d even started work on the store fit-out.
But then… our solicitor called: the tenant had returned the unsigned lease with a letter saying they must “regretfully withdraw.” Their competitor had leased a unit a few doors down, wrecking their projections. And because they’d never signed, we had no legal recourse. The fit-out work meant nothing.
Why it’s a red flag: Verbal commitments and gentleman’s agreements are worthless under pressure. When money’s involved, only signatures matter.
What to do instead: Never, ever assume a deal is done until you have a signed contract in your hand. It’s as simple as that. Someone starting work is not a contract. A handshake is not a contract. Good intentions are not a contract.
Red Flag #3: Letting profits cloud your judgement
One of the reasons we got stung by the Dublin deal was that we were completely fixated on that €600k profit. When the vendor threatened to pull the Dublin deal, all we could see was someone taking our money away. We didn’t stop to think: “What happens if the tenant doesn’t sign?” We had no exit strategy.
Why it’s a red flag: Greed makes you stupid. When you’re counting money you don’t have yet, you stop thinking clearly about risk.
What to do instead: Always have an exit strategy. Before celebrating the profit, ask: “What’s my worst-case scenario, and can I survive it?” If the answer is no, walk away.
Red Flag #4: Ego-driven decision making
The Spain deal was my ego project. I was walking into meetings with Ralph Lauren, Gucci, and Louis Vuitton persuading them to take up units in my new development. I could see myself as a local celebrity, the guy who created a spectacular shopping promenade from scratch. I got emotionally invested in being that person.
That vision cost me €3 million personally, my investors another €9 million, my marriage, my family home, and a decade of my life.
Why it’s a red flag: Ego makes terrible investment decisions. When you’re trying to prove something, whether that’s to yourself or others, you ignore warning signs you’d normally see.
What to do instead: Remove any trace of emotion from the equation. Every time you catch yourself thinking about how impressive a deal sounds or how it will make you look, stop. Strip that away and look at the numbers cold. If you wouldn’t do the deal anonymously, don’t do it at all.
Red Flag #5: Spreading yourself too thin
When the Spain deal started collapsing, I was trying to manage it alongside all my projects back in Ireland. I moved my family to Spain to focus on the commercial centre, but that meant my Irish deals started suffering. When Lehman Brothers collapsed and everything imploded, I didn’t have the bandwidth to handle the crisis properly.
I was spending weeks at a time in Dubai trying to find alternative funding, which meant I was barely home. My wife went from living overseas with her husband and kids to being there alone while I tried to save deals that were already doomed.
Why it’s a red flag: It’s hard enough to manage one major deal in a crisis. When you’re juggling multiple deals across different countries, and something goes wrong, you can’t be everywhere at once. Everything suffers, especially your family.
What to do instead: Focus. One major deal at a time, especially if it’s in an unfamiliar market or jurisdiction. If you can’t physically be there when problems arise, you shouldn’t be in that deal.
Red Flag #6: All-or-nothing outcomes
The Spain deal was binary: either it worked and I’d make millions, or it didn’t and I’d lose everything. When those luxury brand tenants all pulled out after Lehman Brothers collapsed, there was no Plan B. No partial win. Just total loss.
I spent a decade trying to salvage it. Eventually, Spanish commercial courts ordered the property handed back to the original developer: a 100% loss of the €12 million capital the investors and I had put in.
Why it’s a red flag: Binary deals are gambling, not investing. They require everything to work perfectly. Real life doesn’t work perfectly.
What to do instead: Never paint yourself into a corner. Structure deals with multiple exit strategies. Always ask whether you can survive if it goes even 50% wrong. Can you get some of your capital back? Is there a way to pivot?
Red Flag #7: Overestimating your own capabilities
With the Spanish project, I jumped from much smaller deals to a €42 million development in a completely different jurisdiction. I knew retail, so assumed I could handle something this massive, in a foreign country. I completely underestimated the complexity and overestimated my abilities.
I was way out of my depth. I had too much confidence and not enough experience, and it cost me dearly.
Why it’s a red flag: Confidence isn’t competence. Taking a 10x leap in deal size plus changing jurisdictions plus changing property type is a recipe for disaster. Each variable multiplies your risk.
What to do instead: Scale gradually. If you’re going to 10x your deal size, do it in a market you know cold. If you’re going to a new jurisdiction, start with a smaller deal to learn the ropes. Never change multiple variables at once.
The real cost
These weren’t just financial losses. The Spain deal collapsed my marriage, forced the sale of my family home, took time away from my young children, and damaged my health. But I still count myself lucky: I know people who didn’t survive the pressure of similar situations.
I still love real estate. I still invest in property. But I watch for these red flags religiously.
Remember, property investment can absolutely change your life, but it can also destroy lives if you ignore the warnings.
On 17th February, join me for a tactical planning session, designed to help you get clear on your Investment Decisions for the year ahead. We’ll cover why investors buy the wrong deals, and the criteria that fix it. This isn’t about predictions or hype. It’s about understanding what actually moves the needle, filtering out the noise, and leaving with practical steps you can apply immediately to your own situation.
Register at https://elitepropertyaccelerator.com/webinar-registration