7 Steps on How to Become a Real Estate Developer. *AMA on RE Development*

[Antifragile]

Hi @Ginotocino

First of all, congratulations on what you are doing. I think flipping SF homes in SF area is very hard work. You never know what you find when you get into renovation.

We are a merchant developer and do not hold any properties. Part of scaling up when you have limited capital is syndication of equity. In our GP/LP structures, developer gets what is called a “promote” using a “waterfall distribution“ structure. This means that I make more money by selling than by keeping. And since we do not do any projects under 100 units, keeping a project would lock down too much of my own capital. All this is to say, that unfortunately I am not of much help to your plan!

But I will say that yield in secondary markets are much higher than in primary markets today. The pandemic made a shift to secondary markets. You should be able to better control both the costs and achieve higher rents in secondary markets. The metric we use is a Capitalization Rate (CAP) when selling our projects for income valuation.

Hope this helps.

 

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[wolflarsen71]

This is gold. Thank you Antifragile. I'm an architect, so I have always considered the real estate business and its one of my goals some day. I have plenty of questions but I dont want to abuse. Sorry for my english.

First question: For what I read, Did you start in the business by asking for loans (leverage) for developments and finding investors? Or do you started with some of your own capital aswell?

Second: How do you find investors? What it takes to convinced them (what do you show them and how do you sell them the project)? When do you do it?

Third: Im not sure if I get one part (language barriers probably), by high-end you mean starting with the most obvious (less risky) business where you can afford mistakes and get a safe return, or by high end, you mean aiming to users that have the wallet to pay.

Fourth: What is the capitalization rate that you expect? Or any other money numbers you take in account that makes the development viable?

Fifth and I dont bother anymore: In your experience, what are the most profitable developments? What are the common conditions among them if there is any?

Thank you

 

[Antifragile]

This is gold. Thank you Antifragile. I'm an architect, so I have always considered the real estate business and its one of my goals some day. I have plenty of questions but I dont want to abuse. Sorry for my english.

Thanks for your kind words! And don't worry about Engligh, glad to have you asking questions.

First question: For what I read, Did you start in the business by asking for loans (leverage) for developments and finding investors? Or do you started with some of your own capital aswell?

All my deals I've always started with my own capital in them. But since my capital limits what I can do, I always try to bring investors and syndicate a large portion of equity required. This way, instead of doing 2 projects, I can do 10. The answer to your Q is both

Second: How do you find investors? What it takes to convinced them (what do you show them and how do you sell them the project)? When do you do it?

I entered this industry as an employee, worked my way up to a C-suite job. This means I've had years to build relationships needed before we started our business. Both investors and lenders knew me and our team from launch date.

Third: Im not sure if I get one part (language barriers probably), by high-end you mean starting with the most obvious (less risky) business where you can afford mistakes and get a safe return, or by high end, you mean aiming to users that have the wallet to pay.

That was a very general observation. If you build a luxury single family home, you may be able to charge a premium if someone really wants it. But when you are building price attainable (read "commodity") condos, people often compare your unit to the building next door. You can't charge a premium and so any mistake is hard to hide. It's the assumption that Luxury projects have higher profit margins (which isn't always true either!).

Fourth: What is the capitalization rate that you expect? Or any other money numbers you take in account that makes the development viable?

To assess viability of a project we look at Profit on Cost (aka Return on Cost "ROC") and Internal Rate of Return ("IRR"). If ROC is 15% and IRR is 25%, it's a clear go. If lower, then hopefully it's close. But ROC below 10% is out and any IRR below 20% is out.

Cap rate applies to income properties at the time of leasing/renting. And we do not usually use this metric until later when we sell the building to an operator.

Fifth and I dont bother anymore: In your experience, what are the most profitable developments? What are the common conditions among them if there is any?

Thank you

This changes all the time. Prior to 2017 Office was the dominant asset held by institutional investors. Then it dropped and Industrial became king. Condos make good money most of the time but know that most of the developers (from what I can tell) are in condo residential, there are fewer who are in commercial. We focus on building a pro-forma first and then acting according to the results we see. What does this mean? If condos start making more money than industrial, we shift to condos. That's because real estate markets do not go up and down at the same pace in every sector. We are lucky to have talent at the office that can handle multiple asset classes.

 

[wolflarsen71]

I apreciatte the response Antifragile, really useful, hope to read more about your experiences. Good road.

 

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[jdm667]

Prior to 2017 Office was the dominant asset held by institutional investors.

There is a lot of talk about "return to office", but it looks like a lot of people will still be working from home instead of an office.

What do you think the empty office space would be converted to, and how will that affect the RE market short & long term?

 

[tobifastlane]

Loving this thread ! Thanks for the introduction. Real Estate is one of my passions but unfortunately do not have enough of them. will follow this thread !

 

[Antifragile]

There is a lot of talk about "return to office", but it looks like a lot of people will still be working from home instead of an office.

Oh yes, lots of talk about "return to office". And I think both are true, some will come back and others won't. Generally speaking office isn't dead. But my opinion is that there will be a clear division between old and useless (vacant too) office buildings and brand new, perfectly positioned class A. The latter will perform well. For those of us who must have office to run our businesses, we'll pay a premium.

What do you think the empty office space would be converted to, and how will that affect the RE market short & long term?

Hmm... I am not sure there will be as much "empty" space as people think. There will be a flight to quality. People who must have office will secure better quality office. But low B and C office will suffer because it will be hard to convert it to anything. It might need to be re-developed through demolitions. But that can only happen when the price for brand new is high enough to justify demo of an income asset. This only happens in the hottest markets.

Some people think that you can easily convert empty office to residential (for example - rentals). That's not the case. It is very hard to make sense of it.

• Old buildings sometimes need upgrades that are very expensive (seismic etc.)
• Office is usually located in places where you don't necessarily want to live (bad for residential, like away from schools, parks)
• Worse yet, the floor plates for typical office do not divide into nice residential living space. It wasn't designed with that purpose and is hard to make it work.

Love all the questions. Keep them coming even when they are so hard I don't know how to answer!

 

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[Simon Angel]

Nice thread. Handsome guy. Invaluable knowledge.

 

[Antifragile]

Nice thread. Handsome guy. Invaluable knowledge.

I like being called handsome. Flattery will get you everywhere with me!

 

[Simon Angel]

I like being called handsome. Flattery will get you everywhere with me!

It takes one to know one

I haven't read the whole thread yet but I do have a few questions for you:

What does a typical day for you look like now?

What about when you were building this company from the ground up?

What were you most focused on in the beginning? Was it building a quality team to cover the things you can't do, seeking out investors, etc?

Why did you choose RE? Why is it fulfilling for you? Is it because you're improving the living conditions for the community?

If I'm off the mark, what actually gives you meaning?

Thanks, handsome!

 

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[Antifragile]

I haven't read the whole thread yet but I do have a few questions for you:

What does a typical day for you look like now?

Unfortunately there isn't much typical in my day. What I do one day differs from another depending on where my attention is needed the most.

Nonetheless, I like coming to the office downtown after a workout (swim/bike/run). My day then revolves around:

• Review of paperwork (legal or other). For example, when we submit an offer on a new site, I'll review the PSA that our acquisitions team would prepare, as I did this morning before typing this response here.
• Meetings. I think this is probably true for most businesses. Meetings are a way for me to get information from staff and make decisions, give direction.
• Writing/reading/planning. This can be anything, from the latest industry reports, to HR, to investor relations... It's a miscellaneous bucket.

Like I said, nothing is every typical in my day. I don't get into the office at the same time or do the same thing every day. It's totally the opposite.

What about when you were building this company from the ground up?

That time was different because we had no staff, no support. At that time my partners and I did everything with our own hands. Including sending mail! Which I've never done before and had to find a post office near our office. I don't know how to briefly describe a typical day at the start of a business. It wasn't "structured" and but it was focused:

#1 was securing new business (think sales) that would generate us income. Everything came after that.

But since we had no sales/income in the early days, we had a lot of time on our hands. We didn't have projects to execute, systems or people. Prioritizing was easy back then - find a way to make a dollar to survive. That's it.

That meant a lot of calling, meeting brokers, underwriting deals, then finding capital, making "the pitch" etc. I was a crazy time.

It's still a little crazy today but certainly nothing compared to the beginning. I am glad to be past it, it was too much if you ask me.

What were you most focused on in the beginning? Was it building a quality team to cover the things you can't do, seeking out investors, etc?

I've trailed into the answer above. Main focus was finding deals, because deals meant income. Anyone asks me what they should do when they start a business - the answer is so simple it's laughable. Find a way to make your first dollar. Rinse and repeat. Don't let your ego stand in the way of progress. Ego may tell you to "focus on a bigger project" or "complete this big thing to 99% or that big thing" but that's wrong. Only one thing matters - making money to survive the early struggle.

In fact, I am a believer in the concept of "The One Thing" (there is a book on that). What one thing if you did consistently now would have the biggest impact? In the early struggle of a start up - that's generating income for your company. It's the One Thing.

Why did you choose RE? Why is it fulfilling for you?

I've failed a number of times to launch something. It started back when I was at University trying things with no capital, knowledge or connections. My mindset was all wrong back then.

Real estate emerged much later as a choice because I thought it was simple. Buy land, build a building - sell it. Done. Simple. I wanted simple. I craved simple because I failed a few "complicated". The truth is, I wanted something I could understand and make money. Real estate seemed simple and the rest is history. It's not simple, but I thought it was when I started. I was wrong and lucky.

Is it because you're improving the living conditions for the community?

No. I have to be open here and tell you that never crossed my mind. I separate business from charity. When I have enough wealth to do hobby projects, I'll do something to improve the conditions for our community. Today I am focused on delivering what the community wants and charging market rates for our product.

If I'm off the mark, what actually gives you meaning?

Meaning... gee, talk about asking big and hard questions. This is very philosophical. I feel most satisfied when I accomplish things and I feel most joy when my kid giggles playing with me. Meaning for me is having enough experiences to be an example for my family. Meaning for my life is to have freedom to give something to people around me and make some positive (even tiny) impact on other people's lives. It all starts with my family.

 

[0to100]

In case you haven't noticed, real estate is kind of a big deal.

Just think about it – where would we all be without homes to shelter us, shops to buy our groceries, or offices to work in? Pretty much nowhere, that's where.

And when it comes to real estate development, things get even more interesting. After all, it's the developers who are responsible for creating all these places we call "homes" and "offices".

But what exactly is real estate development?

I struggle to find other job description as varied as a "Developer".

Development ranges from the acquisition, renovation, and re-lease of existing buildings to... Buying raw land, carving it and and the sale of parcels to others. Developers convert ideas on paper into real property. Because developers are responsible for the success or failure of a property, they typically take the most risks. And as with any value skew they can receive the greatest rewards.

Real estate development is a process. It is planning, designing, financing, constructing, and managing of real estate. In other words, it's the business of creating homes, shops, warehouses and offices.

There are a lot of different challenges that come with this line of work. For example, developers need to be well-versed in a variety of areas, including construction, law, finance, and marketing. They also need to be able to think on their feet, as the market for real estate can be very volatile. The approval and construction time is long and can crest a market cycle!

Different developers focus on different areas of real estate. Some specialize in residential development, while others focus on commercial or industrial projects. There are also developers who work on a mix of projects, or who simply dabble in a bit of everything.

Whatever their focus may be, one thing is for sure: real estate developers are essential to the success of our communities.

Here I give you a 7 Steps on How to Become a Real Estate Developer. For $9.99 you get this course. But wait, there is more! ...

If you have been on this forum for more than a minute, you know I lied about the course or the exact 7 steps. There is no such thing as a "follow these steps" recipe in business and RE Development is no exception. Instead of expecting a course, you can...

Ask me anything on RE Development.​

The real estate industry is divided into: residential, office, commercial, industrial, and land. I will answer questions about: residential (rental and condo), office and industrial.

The process:

• site acquisition,
• regulatory approvals,
• market analysis,
• design and planning,
• construction and development financing,
• joint ventures,
• construction,
• marketing and sales.

I will answer questions on specific parts of the development process.

Like any business, there have been books written. Volumes of books on various parts of the process. I'll do my best to answer questions.

For more info on me and what I do, please listen to @Kak Kyle Keegan Radio show.

All questions here are welcome here.

Cheers to your success! I'm a 25 year old aspiring developer, and if you're still inclined to answer questions...

It seems like most successful REI come from the school of hard knocks, vs formal education... What career steps did you take that helped you get to mountain top of RE Development? Mentors? Courses? Any great real estate development books?

Very interesting to hear about how you work collaboratively with GCs. Do you contract architects/designers similarly, or just pay them their fee? I think it'd be great for this thread if you elaborate on this stage in the process. (Do you ever recycle design plans? How do you choose an architect to work with? Anything else you'd think would help get many of us up to speed with you )

Thank you.

 

[Antifragile]

Cheers to your success! I'm a 25 year old aspiring developer, and if you're still inclined to answer questions...

Great, you are the perfect audience for this thread! Hope I can help.

It seems like most successful REI come from the school of hard knocks, vs formal education... What career steps did you take that helped you get to mountain top of RE Development? Mentors? Courses? Any great real estate development books?

Most of the learning I did was on the job while seeking out answers from resources outside of the job. What does that mean?

A typical path to becoming a developer is one of thee ways:

• Architecture. Being an architect + entrepreneur is how many greats got into the business.
• Engineering. This is just a skill set and a way to approach problems/solutions. Engineers are known for being detail oriented and our business is run on details.
• Finance. Many of local mega developers started with knowing how to handle capital (this business is very capital intensive) and hire talent to help with the rest.

I belong to the last category. Most of what I know, I learned by doing. But I had a lot of help! Getting a job in the industry early meant that as I was progressing my employee career, I was learning without downside risk. Mind you, it took me 8 years before I started my own company.

Yes, I also took courses, like "The numbers behind RE Development" put on by a local advocacy group (Urban Land Institute) in my year 2 as employee. I've attended countless seminars, finance and accounting professional development courses - I honestly lost count, too many too list that's for sure. I still do!

I've also read books like:

• Professional Real Estate Development: The ULI Guide to the Business
• Finance for Real Estate Development
• Making It in Real Estate: Starting Out As a Developer

And countless others on negotiations, sales and marketing, legal structures. Your question is getting back a long while, a decade+ ago.

My mentors in this business were first my employers! But closer to my chest, I was lucky to have mentors who guided me on how to become an entrepreneur, how to start and build my own business.

Very interesting to hear about how you work collaboratively with GCs. Do you contract architects/designers similarly, or just pay them their fee? I think it'd be great for this thread if you elaborate on this stage in the process. (Do you ever recycle design plans? How do you choose an architect to work with? Anything else you'd think would help get many of us up to speed with you )

Thank you.

Architects... love or hate them, they are a key consultant. For this reason, our employees in the Development Manager role are very often architects themselves. Currently we have three on staff. They make a decision on which architect to use externally for which project. This is a key decision. And yes, we always work collaboratively. It's the only way we know.

Typically, based on a project size and complexity - an architect would give us a quote and we'll hold them to that quote. Unless there are scope changes and re-designs, quote is a quote.

 

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[MetalGear]

Great thread!

• I have been working on raising private capital.
• Asking people for money and to trust me with their capital can be daunting.
• After a pep talk from friends, I finally managed to get verbal commitments from 3 private investors/hard lenders.
• They said "Sales is the transfer of energy of belief in your self, your product, your service to another person."
• This was a very profound statement and helped me understand where I had a "blockage".
• What is your favorite resource on sales and raising private equity for development?

 

[Mathuin]

Not in RE but this is a great thread!

 

[Antifragile]

What is your favorite resource on sales and raising private equity for development?

For raising capital, Pitch Anything by Oren Klaff

 

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[Antifragile]

For raising capital, Pitch Anything by Oren Klaff

I was in a hurry when typing this @MetalGear , allow me to expand on my post. This book for me was a 10/10 on usefulness. I've been applying principles similar to these for my entire career. Similar to MJ's Unscripted book, it was a validation of methods that worked for me but neatly arranged and explained.

For example, here are a few quotes:

"Pitches are sent from the modern—and smart—part of the brain: the neocortex. But they are received by a part of the brain that is 5 million years older (and not as bright.) This is a serious problem if you are trying to pitch anything."

"When frames come together, the first thing they do is collide. And this isn’t a friendly competition—it’s a death match. Frames don’t merge. They don’t blend. And they don’t intermingle. They collide, and the stronger frame absorbs the weaker."

"The lesson of the cop frame is an essential one: If you have to explain your authority, power, position, leverage, and advantage, you do not hold the stronger frame."

"“The revenue is $80 million, expenses are $62 million, the net is $18 million. These and other facts you can verify later, but right now, what we need to focus on is this: Are we a good fit? Should we be doing business together? This is what I come here to work on.”"

"...three of the most fundamental behaviors of human beings: 1. We chase that which moves away from us. 2. We want what we cannot have. 3. We only place value on things that are difficult to obtain."


In summary, the Pitch Anything book is pure gold.

 

[100k]

Thanks for the AMA.
I would like to learn more about your so called partners, what exactly do you mean ? Can you flesh that out a bit.

---------

2nd question.

Let's say I have no real estate experience and want to develop a super block like those in Barcelona with like 1000 home units & 36 commercial units on the ground. How would you go about it?

My plan was to raise $1 mil. from LPs, establish a special purpose vehicle, partner up with a company with a solid track record in constructing master planned communities, have that partner be responsible/liable for delivering & constructing a high quality product to the specification we've agreed upon, then use have the use the $1 mil. to issue a corporate bond and raise $200 mil. with the MPC partner liable for building the whole thing... and once its built, they'd transfer ownership to us, we go to the traditional banks and get a commercial mortgage for the whole thing - then we sell the units to people.

The homeowners will also be the landlords/owners of the commercial ground units and we'd hire a company to help with management after the delivery.

Am I on the right track, is there something I'm blind to that I should consider or do differently.

Thanks in advance.

 

[forester]

Cool thread. Ive been quite successful in the realm of real estate. Timber and land to be precise. Ive been a forester for 25 yrs. Owned my own forestry consulting firm for 15. Ten years ago bought my first parcel, cut it , paid for it with the timber and sold it to an abutter for exactly what I originally purchased it for. Made six figures in less than one month. Since then Ive averaged one of these deals a year. Was on a roll to up the # of deals p/yr to 3-4..but the market in my state , since 2021..is too hot for my level of risk. Im a strategic risk taker not a reckless speculator. Seeing where the market was headed, I got my real estate license in 2020, and have since focused on representing the selling of large timberland parcels vs the buying of them. And..when they sell providing forest management services to the new owners.
Its a good gig and that brings great satisfaction. But..Im chopping at the bit for the market to cool and for good deals to make a reappearance. Buying timberland for myself is my real passion.

 

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[Antifragile]

Thanks for the AMA.
I would like to learn more about your so called partners, what exactly do you mean ? Can you flesh that out a bit.

Business partners and Limited Partners (GP/LP structures).

---------

2nd question.

Let's say I have no real estate experience and want to develop a super block like those in Barcelona with like 1000 home units & 36 commercial units on the ground. How would you go about it?

I honestly wouldn’t have the balls to try to do something this big with no real estate experience. So I wouldn’t go about it.

My plan was to raise $1 mil. from LPs, establish a special purpose vehicle, partner up with a company with a solid track record in constructing master planned communities, have that partner be responsible/liable for delivering & constructing a high quality product to the specification we've agreed upon, then use have the use the $1 mil. to issue a corporate bond and raise $200 mil.

If you find a way to do that, please share I’d love to learn.

with the MPC partner liable for building the whole thing... and once its built, they'd transfer ownership to us, we go to the traditional banks and get a commercial mortgage for the whole thing - then we sell the units to people.

The homeowners will also be the landlords/owners of the commercial ground units and we'd hire a company to help with management after the delivery.

You get the gist of development, organized chaos to deliver a product. The challenge I see is that you say you have no experience and yet you think you’ll be able to partner with reputable groups. Why do they need you?

Worse yet, lenders will not give you any money if you don’t know what you are doing in development. Most banks require expertise and experience for bigger projects. Otherwise it’s too much risk for them.

This is another barrier to entry into development.

Am I on the right track, is there something I'm blind to that I should consider or do differently.

Thanks in advance.

You are on the right track, except lack of experience and lack of funds.

 

[Mathuin]

Let's say I have no real estate experience and want to develop a super block like those in Barcelona with like 1000 home units & 36 commercial units on the ground. How would you go about it?

Jesus, FULL SEND lmao

 

[100k]

Business partners and Limited Partners (GP/LP structures).

So basically just the investors - that's the extent of your partnerships ?

Not so much strategic partnerships like I had in mind.

I honestly wouldn’t have the balls to try to do something this big with no real estate experience. So I wouldn’t go about it.

If you find a way to do that, please share I’d love to learn.

There is a way - at least according to Dan Peña.
Build a team with the experience you, the goal of that team is to bring prestige and "experience" to the table so your firm is taken seriously. You give those retired / semi-retired people with a ton of experience and good-will etc. equity in the company.

You get the gist of development, organized chaos to deliver a product. The challenge I see is that you say you have no experience and yet you think you’ll be able to partner with reputable groups. Why do they need you?

As explained above, my strategy was to put together a senior management team (C-suite exes) that have the experience I lack. Let them bring credibility and skills.

But my plan B was to create a smaller fastlane business first in the real estate space solving a profitable problem, and more importantly giving me the experience and CONNECTIONS I need to make this bigger project upto 5 years down the road.

Worse yet, lenders will not give you any money if you don’t know what you are doing in development. Most banks require expertise and experience for bigger projects. Otherwise it’s too much risk for them.

This is another barrier to entry into development.

You are on the right track, except lack of experience and lack of funds.

I guess, going with plan B is probably my best bet - get some experience in real estate, get some useful connections and then execute the bigger plan with a team that have expertise, experience & prestige.

I'll stay on the grind. Thanks for sharing your thoughts.

 

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[100k]

Jesus, FULL SEND lmao

What's the point of going half throttle? I'm not getting any younger.

 

[Bigguns50]

@Antifragile , outstanding thread! Common sense, Knowledge, Experience all shine through. I got wood reading all this. Ok, not really, but it's great! Much appreciated.

I live in Sedona,AZ. NOT a friendly place for commercial developers on all fronts. High-end residential is good.

This question might be out of your sphere but here goes. I contacted an out-of-state, Foreign LLC company that owns 2 commercial buildings near my office that they purchased in 2018. The properties have sat vacant ever since. I asked if they were for sale or rent. They replied by saying they have no intention of selling any properties in Sedona. My question is Why?

I only came up with 2 possible answers. 1) They are holding to sell for a good profit (they paid $7,000 in taxes in 2021 on both properties). 2) They are making high profits in other businesses they have and are using these to lower their taxes.

Thoughts?

 

[Antifragile]

@Bigguns50 Thanks brother. Comments like yours make my day!

There are a few reasons why investors may choose to hold onto commercial real estate even if it has no income or tenants. It's important to understand that there is no one "right" way to invest in commercial real estate. Some investors prefer to buy properties that are already leased and generating income, while others prefer to purchase properties that are vacant. There are pros and cons to both approaches, and it really depends on the individual investor's goals and preferences.

With that said, here are a few reasons why investors might choose to hold onto a property even if it has no income or tenants:

1. The property is in a desirable location. It may have development or growth potential that's waiting for its time.

2. The investor already has a plan for the property and is waiting for the right time to execute it. Setting up a business that will need future space?

3. The investor expects the value of the property to appreciate over time. Pure capital gains play.

4. The investor is holding the property as a long-term investment. Especially foreign investors may want to "park money". Tenants can mean management of leases (asset management tasks) etc.

Each of these reasons has its own set of benefits for investors. For example, owning a property in a desirable location can be a great way to attract new tenants in the future. And if the investor already has a plan for the property, they can get a head start on finding new tenants as soon as the property becomes available.

There is some irony in that development sites are more liquid without leases! One of the reasons I often pass on a deal is that it's locked with a tenant with no demolition or cancellation clauses. Meaning, I can't develop it until tenant's lease expires...

 

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[joe3k]

I entered this industry as an employee, worked my way up to a C-suite job. This means I've had years to build relationships needed before we started our business. Both investors and lenders knew me and our team from launch date.

What did you do as your job when you were an employee and what C-suite job did you get to?

 

[Edwin34]

Excellent question! 10/10

When looking for a place to purchase a site, it's important to do your research first. You don't want to end up in a situation where you've purchased a site, only to find out that the municipality has placed a moratorium on building. Here are some tips on how to avoid this situation.

The first thing you need to do is research the municipality in which you're interested in buying a site. You want to make sure that the municipality is friendly to business and has a good track record of issuing building permits.

You also need to be aware of any potential legal constraints that could prevent you from building your project. For example, if the municipality has a zoning bylaw that doesn't allow your project, you won't be able to proceed.

Finally, be aware of any political constraints that could impact your project. For example, if the municipality is in the middle of an election, the new government may have different plans for the area and your project could be cancelled.

By doing your research up front, you can avoid any unpleasant surprises down the road. So, do your homework and choose the right municipality to avoid headaches and delays with your project.

1. Read the Official Community Plan (OCP) and Zoning by-laws.
2. Call the city staff and discuss your idea.
3. Meet with Mayor as par of due diligence.

The above is the job for a Development Manager at my office.

Great information! Thank you for sharing.

 

[Edwin34]

Unfortunately there isn't much typical in my day. What I do one day differs from another depending on where my attention is needed the most.

Nonetheless, I like coming to the office downtown after a workout (swim/bike/run). My day then revolves around:

• Review of paperwork (legal or other). For example, when we submit an offer on a new site, I'll review the PSA that our acquisitions team would prepare, as I did this morning before typing this response here.
• Meetings. I think this is probably true for most businesses. Meetings are a way for me to get information from staff and make decisions, give direction.
• Writing/reading/planning. This can be anything, from the latest industry reports, to HR, to investor relations... It's a miscellaneous bucket.

Like I said, nothing is every typical in my day. I don't get into the office at the same time or do the same thing every day. It's totally the opposite.



That time was different because we had no staff, no support. At that time my partners and I did everything with our own hands. Including sending mail! Which I've never done before and had to find a post office near our office. I don't know how to briefly describe a typical day at the start of a business. It wasn't "structured" and but it was focused:

#1 was securing new business (think sales) that would generate us income. Everything came after that.

But since we had no sales/income in the early days, we had a lot of time on our hands. We didn't have projects to execute, systems or people. Prioritizing was easy back then - find a way to make a dollar to survive. That's it.

That meant a lot of calling, meeting brokers, underwriting deals, then finding capital, making "the pitch" etc. I was a crazy time.

It's still a little crazy today but certainly nothing compared to the beginning. I am glad to be past it, it was too much if you ask me.



I've trailed into the answer above. Main focus was finding deals, because deals meant income. Anyone asks me what they should do when they start a business - the answer is so simple it's laughable. Find a way to make your first dollar. Rinse and repeat. Don't let your ego stand in the way of progress. Ego may tell you to "focus on a bigger project" or "complete this big thing to 99% or that big thing" but that's wrong. Only one thing matters - making money to survive the early struggle.

In fact, I am a believer in the concept of "The One Thing" (there is a book on that). What one thing if you did consistently now would have the biggest impact? In the early struggle of a start up - that's generating income for your company. It's the One Thing.


I've failed a number of times to launch something. It started back when I was at University trying things with no capital, knowledge or connections. My mindset was all wrong back then.

Real estate emerged much later as a choice because I thought it was simple. Buy land, build a building - sell it. Done. Simple. I wanted simple. I craved simple because I failed a few "complicated". The truth is, I wanted something I could understand and make money. Real estate seemed simple and the rest is history. It's not simple, but I thought it was when I started. I was wrong and lucky.



No. I have to be open here and tell you that never crossed my mind. I separate business from charity. When I have enough wealth to do hobby projects, I'll do something to improve the conditions for our community. Today I am focused on delivering what the community wants and charging market rates for our product.




Meaning... gee, talk about asking big and hard questions. This is very philosophical. I feel most satisfied when I accomplish things and I feel most joy when my kid giggles playing with me. Meaning for me is having enough experiences to be an example for my family. Meaning for my life is to have freedom to give something to people around me and make some positive (even tiny) impact on other people's lives. It all starts with my family.

Great way to share your experience with real estate. Thank you.

 

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[Antifragile]

What did you do as your job when you were an employee and what C-suite job did you get to?

I started on the finance/accounting team (Manager of Finance, Director) until eventual CFO role before founding our company. Back then I chose this path because running finance meant seeing everything and being in every meeting. Short of being the CEO, of course, it was the best place for me to see all decisions and learn all aspects of the business.

At the same time, I'd always volunteer to help other employees and unsurprisingly everyone always said yes to me doing their work! This meant I was exposed to acquiring real estate distressed assets (court), buying hospitality venues, running a dive bar, negotiating leases with tenants (i.e. reviewing Starbucks lease is an experience that's highly valuable to this day), managing tenant leases and evictions, helping sales centre staff, underwriting construction costs with estimators etc. I was everywhere because I needed to learn. That attitude kept getting me promoted. But it wore me out. I still had to do my own job tasks (like running my own team) on top of all these other tasks.

When I reflect back and do some soul searching, I feel I worked too long and too hard. Back then I was so focused on "making it" that I ate poorly and exercised very little. I literally had the financed BMW that MJ mentions in his books *facepalm*. My life wasn't much in balance, it was a total grind. On top of that I had a side hustle business with a partner. I was always reading, learning, doing side gigs to earn more money.

There is probably a better and shorter path than mine! But since you asked, I thought I'd share...

Today, I am glad I have the scars of my experience.

 

[Bigguns50]

@Bigguns50 Thanks brother. Comments like yours make my day!

There are a few reasons why investors may choose to hold onto commercial real estate even if it has no income or tenants. It's important to understand that there is no one "right" way to invest in commercial real estate. Some investors prefer to buy properties that are already leased and generating income, while others prefer to purchase properties that are vacant. There are pros and cons to both approaches, and it really depends on the individual investor's goals and preferences.

With that said, here are a few reasons why investors might choose to hold onto a property even if it has no income or tenants:

1. The property is in a desirable location. It may have development or growth potential that's waiting for its time.

2. The investor already has a plan for the property and is waiting for the right time to execute it. Setting up a business that will need future space?

3. The investor expects the value of the property to appreciate over time. Pure capital gains play.

4. The investor is holding the property as a long-term investment. Especially foreign investors may want to "park money". Tenants can mean management of leases (asset management tasks) etc.

Each of these reasons has its own set of benefits for investors. For example, owning a property in a desirable location can be a great way to attract new tenants in the future. And if the investor already has a plan for the property, they can get a head start on finding new tenants as soon as the property becomes available.

There is some irony in that development sites are more liquid without leases! One of the reasons I often pass on a deal is that it's locked with a tenant with no demolition or cancellation clauses. Meaning, I can't develop it until tenant's lease expires...

Thank you for taking the time for this brother! I also downloaded and started reading Pitch Anything. Thanks for the recommendation!