Real estate developers are talented entrepreneurs who can seek out a piece of land, buy it, and develop the land into a project like housing developments or commercial malls. They also take on smaller projects such as taking an existing building and making major improvements. They finance the real estate deals from start to finish. Developers take on the greatest risk but will reap the greatest rewards in the end. Here are some tips on how to become a successful real estate developer.
Have a strong personal foundation
Having a strong educational background will help build consistent success within the real estate development world. Degrees in finance, real estate, law, and construction management are often the most useful for this line of work. If going back to school for a 4-year degree isn’t in the cards for you, find someone who’s already in this industry to work under and get your license in real estate to obtain a base knowledge of the industry.
Build your credit
Having a good credit score will allow you to have more options when you’re signing up for a loan to finance your first project. Residential real estate is much easier to break into when you’re first starting out. However, commercial real estate can bring a much higher return on investment.
Network and build strong connections
One real estate developer cannot possibly take on all the tasks of developing real estate. To be successful, build a strong team to help you get from start to finish on all your projects. Depending on your project, hire people with the right skill set to make sure the job’s done right.
Do your research
Risk is a big part of being a real estate developer. Knowing what the right risks to take is what sets apart the successful developers. Each risk you take should be well researched and calculated to bring about the highest ROI. Research everything you can, especially any potential challenges such as economical, financial, legal, and technological issues.
Be patient and don’t bite off more than you can chew
Before financing a project, be mindful of the timeline it will take to complete the project. Real estate development doesn’t happen overnight. Best practices suggest planning for an additional six months for any unseen problems that can and will arise throughout your project. Having a good understanding of the marketing can help when figuring out the timeframe of your project. If you don’t know the market well, seek out a real estate agent who does.