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REAL ESTATE How can i become a real estate developer??

FlowMaster

PARKED
May 30, 2017
2
0
6
21
Williamsburg, Virginia
I have been fascinated by real estate development for years now since i was a little kid, and i have decided that this is the career path i want to take.

So what is the best way to become a developer?

1. Get education, work for a developer

2. Still get education while rehabbing properties , then find a small residential development deal (3 subdived lots for single family homes) and build my portfolio from that point on, while having a mentor starting out
 

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BrandonS85

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Sep 8, 2015
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11 years ago when I got my real estate license, I got into it with the intention of becoming a developer, I figured it was the best way.

Overall I still feel that it's the best way to do it. I don't know if you would consider what I do as of today true development (I buy dumpy houses, fix them up, then rent them out). But now after doing the rental/rehab thing for 4 years, I'm getting pretty close at developing one of my big life goals (Either storage units, a trailer park, or an apartment complex). The big thing is you have to have MASSIVE experience with real estate to know what to do, true development is daunting, and I learn new things about what is needed every week or so that gets me closer to having the right contacts to do development. The thing that continues to worry me about development is that you HAVE to know the right people to get the job done and be profitable. You simply can't look in a phone book, call some people and have it done. I've seen developers lose millions of dollars, years of time, and their livelihoods because they had the wrong sub-contractor who had no clue what they were doing. Those are things i deal with as a landlord but to a much, much smaller extent.
 

BrandonS85

Bronze Contributor
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Sep 8, 2015
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The "secret" to success in the entire real estate field.
And there's so much nuance to it, that you have to be in the field to understand.

For instance, I have a house that needs to be completely re-sided, landscaping done, and other work. If I picked a run-of-the mill general contractor that many new investors would do, I would expect to spend $20k on the job.

But, I don't do that, I have 'a guy' that will do it with his crew for $5k or so. That's a unbelievably huge difference in my profit margin, and not only will he get it done, but he's also pretty quick once he starts. Finding 'this guy' has taken 4 years. 3 of those years was time spent in building connections within the local investment community, then 1 year of piggy-backing on others to learn the hard lessons with contractors they've already paid for.
 

Ubermensch

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I have been fascinated by real estate development for years now since i was a little kid, and i have decided that this is the career path i want to take.

So what is the best way to become a developer?

1. Get education, work for a developer

2. Still get education while rehabbing properties , then find a small residential development deal (3 subdived lots for single family homes) and build my portfolio from that point on, while having a mentor starting out
I love OP's that ask questions that could simply be typed into Google.

No wonder the veterans ignore threads like this. The laziness of the original post seriously suggests that the poster is just an action faker in real life, and will never actually take the steps to develop a property:

1) Possess or obtain the funds to build the property.

2) Decide which type of property needs to be developed (examples - hotels, hospitals, commercial office high rise, commercial office park, industrial warehouse, industrial manufacturing plant, student housing complex, senior housing complex, retail facility, etc).

3) Hire the architects, engineers and contractors to perform the work (in most cases, the general contractor will hire the subcontractors - roofing, flooring, electrical, mechanical, drywall, concrete, steel, lumber, plumbing, fire alarms, sprinklers, security, etc).

*dab*
 
OP
OP
F

FlowMaster

PARKED
May 30, 2017
2
0
6
21
Williamsburg, Virginia
I love OP's that ask questions that could simply be typed into Google.

No wonder the veterans ignore threads like this. The laziness of the original post seriously suggests that the poster is just an action faker in real life, and will never actually take the steps to develop a property:

1) Possess or obtain the funds to build the property.

2) Decide which type of property needs to be developed (examples - hotels, hospitals, commercial office high rise, commercial office park, industrial warehouse, industrial manufacturing plant, student housing complex, senior housing complex, retail facility, etc).

3) Hire the architects, engineers and contractors to perform the work (in most cases, the general contractor will hire the subcontractors - roofing, flooring, electrical, mechanical, drywall, concrete, steel, lumber, plumbing, fire alarms, sprinklers, security, etc).

*dab*
Ha, thanks for your comment,
However i have researched property development many times over, i just wanted to get some insight from entrepreneurs that has done it on this forum.
 

Daniel Newton

New Contributor
Jun 12, 2017
9
9
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31
florida
You don't need education or money to start in real estate development. What you do need is drive, training (different from education) and patience. Development is a highly technical field that incorporates economic analysis, construction, contract law, finance and project management skills. The most effective way of becoming successful on your own is to begin under a mentor who will train you in the skills that you need personally and show you how to hire the other skills that it takes to get the job done. A mentor will also show you how to finance projects - when to use your money and when to use someone else's (investors or lenders). So, to answer your question, I recommend you become a real estate developer by first working for a successful developer to acquire the skills you need.
 

SteveO

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Development can be good. Cycles become a challenge though. I like cycles.

I like to buy when real estate is selling well below replacement cost. Below what a developer can build for. I then like to sell when the value approaches replacement cost.

Development can hit some of those cycles though. Cheaper land and cost to build during downtimes. You will have the advantage of building cheaper than you can have it built for.

The trap is that it is easy to build when values are going up. Then everything gets overbuilt and you are holding the hot potato.
 

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DustinH

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I would add it takes a lot patience and guts to develop. Many times you won't realize any profits for a couple years and you have to fight battles with city managers, code inspectors, bad press, and neighbors who think they are entitled to tell you what to do with your land because they're selfish pricks who don't want any new houses next to them.


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SteveO

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I would add it takes a lot patience and guts to develop. Many times you won't realize any profits for a couple years and you have to fight battles with city managers, code inspectors, bad press, and neighbors who think they are entitled to tell you what to do with your land because they're selfish pricks who don't want any new houses next to them.


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This is why it can be lucrative. Barrier to entry...
 

DustinH

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This is why it can be lucrative. Barrier to entry...
True. There are barriers that keep the small time investors away. If you have the cash to survive for a few years without revenue and can overcome all the B.S. problems that arise then do it. If I had the capital then I would do it. I'm just not to that level yet. The housing inventory is so low across country and demand is so high that development would be a worthwhile endeavor. The inventory in my area is around 1.8 months supply. They can't build new construction fast enough to meet the demand even though builders raised prices by $150,000-$200,000 per home compare to 4 years ago. Go and do it. It will be hard-earned money but it can be fun too. Depends on your perspective and how well you handle problems situations that arise.
 

SteveO

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True. There are barriers that keep the small time investors away. If you have the cash to survive for a few years without revenue and can overcome all the B.S. problems that arise then do it. If I had the capital then I would do it. I'm just not to that level yet. The housing inventory is so low across country and demand is so high that development would be a worthwhile endeavor. The inventory in my area is around 1.8 months supply. They can't build new construction fast enough to meet the demand even though builders raised prices by $150,000-$200,000 per home compare to 4 years ago. Go and do it. It will be hard-earned money but it can be fun too. Depends on your perspective and how well you handle problems situations that arise.
I teamed up with a couple of people about 12 or 13 years ago and developed 10,000 sq ft of medical office space. All the bullshit that you stated applied. We still made money. All of us had cash reserves and other income. The timeframe was planned for less than a year. It took 2 years to build and another year to lease it up. It cashflowed decently with 5000 ft leased.

We sold it to a medical group that wanted to lease the last 5000 sq ft. We convinced them that it was better to buy the whole thing than lease.

It was a lot of work and many delays from the city and contractor. I felt that with practice and focus that it would be a great way to go.
 

MiguelHammond10

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You need to Earn a Bachelor's Degree. While earning a bachelor's degree is an important step in becoming a real estate developer,
this degree doesn't have to be in a specific subject. then Gain Experience in Real Estate. moreover Consider a Master's Degree and Certification then Continue Education.
 

SteveO

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You need to Earn a Bachelor's Degree. While earning a bachelor's degree is an important step in becoming a real estate developer,
this degree doesn't have to be in a specific subject. then Gain Experience in Real Estate. moreover Consider a Master's Degree and Certification then Continue Education.
Seems that you are saying that you need a degree in order to get a job and gain experience. Gaining experience as a builder could be just as valuable.

There is nothing wrong with having the extended education but I don't see is as the best path toward success in this business.
 

Bottomsouth

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Jan 1, 2017
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Work in construction, then a developer, get Real Estate and GC license to cut the middle man out, build a network and off you go.

That is, if you have the patience and will.
 

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