The Road to Becoming a Successful Real Estate Developer
Nicole Rubin of insureabilities.com.
Real estate developers have always been an essential part of the commercial real estate industry. They are not only responsible for developing various projects and making them commercially viable but ensuring that all aspects of the project are completed on time and within budget.
That’s a tall order and requires them to wear a lot of hats simultaneously! Becoming a commercial real estate developer requires a lot of time and effort. It takes years to learn the ins and outs of the business, but it is worth it because there is definitely money to be made, plus the personal satisfaction of seeing a project come to life. Today, South Jersey Real Estate Investors Association shares some tips and resources to help you get started.
A Little Background
Successful real estate developers will normally hold a bachelor’s degree in management, business, marketing, engineering, or architecture. There are no undergraduate degrees in Real Estate Development, but there are master’s-level degrees in the field. You’ll almost certainly have to have a real estate license, which will require taking those courses and passing the state real estate exam in your state. An exceptional background or education in finance and project management and an entrepreneurial mindset will be important to your success.
It goes without saying that working as a real estate agent for at least a couple of years first will give you an enormous amount of practical experience. This will not only gain you on-hand real-time real estate know-how, but you’ll also learn how to prevent common mistakes and gain invaluable insight into your local real estate market and market trends.
Finding the Best Site for a New Development
Finding the perfect site to develop for commercial real estate is not an easy task. You need to consider a number of factors before you can make your decision. The most important factor to consider is location. The site should be in an area where there is demand, be it residential or commercial property. The population density needs to be high enough so that there will be plenty of customers who are interested in what you have to offer. It's also essential that there are no zoning restrictions or permitting requirements that will hamper your ability to develop on the lot, such as height restrictions, building setbacks, etc.
Funding Options
There are many ways to fund commercial real estate projects, but they all require some form of investment from the developer. The most popular forms are bank loans, equity investing, and debt financing, in which an investor provides a loan to a borrower with interest rates attached. Various funding options will include secured loans from banks or other financial institutions. Equity financing from investors, government grants or subsidies, and private investors and partnerships.
Building a Team
Your real estate development project will be an expensive and time-consuming process. You’ll require a team of professionals who are experts in their fields. A project manager coordinates the work of all team members and manages the budget, timeline, and scope of the project. An architect who can design the building with an eye for functionality, aesthetics, accessibility, and sustainability. An interior designer who can create an attractive and functional space while meeting the needs of comfort and productivity. And a construction manager who will manage the actual construction from deadlines, budgets, quality control, and ensuring that safety standards are met.
Expanding Your Skills
Practical experience and preparation can go a long way, but if you want to give yourself an edge over the competition, it might be a good idea to go back to school and earn a business bachelor's degree. That will give you additional insights and practical knowledge to help you in your real estate efforts, and thanks to the flexibility of online learning platforms, you can proceed at your own pace, without needing to take a lot of time off.
Understanding Contracts
A real estate development contract will define the legal relationship between you, the developer, and the client. It will detail exactly what is expected from both parties in terms of responsibilities, liabilities, rights, and obligations.
There are three main types of real estate development contracts. A development agreement, a joint venture agreement, and a construction management agreement. An attorney will be necessary to draw up and review any contract before the project can go ahead.
Saving these contracts into a PDF that you can then convert into a Word document will make it possible to make changes and edits. Check here how to figure out how to convert PDF to Word. You simply upload your PDF, convert the file into Word, and then save it again as a PDF when you've completed the edits.
Becoming a commercial real estate developer means putting in a lot of work and commitment to getting the right education, experience, and technical know-how. But with the right investment in time and resources, it can be an exciting and very lucrative career.
South Jersey Real Estate Investors Association is a premier real estate investment association and strives to bring in only the very best national and local speakers to provide the latest cutting-edge techniques based on any changes in law or the marketplace. Call (856) 663-1133.