Real estate developers are entrepreneurs who obtain land, prepare it for development and manage the construction process. Successful developers know it takes more than just money and a vision. It takes an education, experience with problem solving, a deep understanding of the market and the ability to form lasting relationships, among other things.
Having to stay on top of every detail during the life cycle of a development project means knowing what you’re talking about. Getting at least an undergraduate degree is generally regarded as a good idea. Most real estate developers have at least one degree. Their majors vary between civil engineering, architecture, business and management. Civil engineering and architecture degrees will teach how things are built. Business and management degrees will teach logical reasoning, critical thinking, and analytical abilities, in addition to learning about modern-day management practices.
Do your research. Where are you building? What are you building? Who else is doing it? What is the land like? Has anyone tried building there before? Maybe there’s a reason it didn’t work out. Who is your demographic? It’s also important to examine the socio-economic climate before you invest. Your ultimate goal is to sell property, so study facts such as the unemployment rate and other statistics from the Bureau of Labor. If you choose commercial over residential building, that changes your research priorities. Another thing to research is the interest percentage on loans, because those will affect your profit margin.
Make sure you know the law. If you don’t know real estate law, get yourself a good real estate lawyer. Being a real estate developer requires lots of different types of contracts, so you need somebody in your corner who can both write and decipher anything that comes your way. A good real estate lawyer will also help find locations in areas that are easy to zone, and will help you obtain necessary permits.
Gain some experience. Exposure to the industry before taking on any personal risk is a great way to learn what’s at stake. Work in a position that involves the development, buying, or selling of real estate to gain exposure in the field. If possible, get your real estate license. You can increase communication and sales experience, and become familiar with housing prices in the local market. It is also a fantastic way to network and find loyal clients while building rapport with other members of the industry.
Another key element is being nice to people. It takes a village to complete a real estate project. Networking is very important because you will need connections throughout every step of this project and beyond. It’s important to learn how to communicate with everyone, not just people similar to yourself. You will cross paths with a variety of people in the real estate game, so you will need to respectfully convey what your expectations and goals are. That includes everyone from the Bank CEO offering a loan to the sub-contractor hammering a nail. Just remember: It’s nice to be nice. People will remember it and it will come back to you tenfold. Since communication is a two-way street, you must also listen to people when they voice concerns or have needs. It’s important to always maintain an “open door policy” throughout a development project.
If done correctly, using both your brain and your heart, real estate could be one of the best investments you ever make.