Keys to Successful Real Estate Development
Many people have dreams of becoming a real estate developer because they believe it is a fancy job that is filled with accolade and lots of big paychecks. It is true that real estate developers like Chase Rubin have built very successful businesses, but what is equally true is that people like him have dedicated an inordinate amount of time, energy and money figuring out how to make the business successful. And like every other business, they have to be great at their jobs in order to have success. In the end, what keeps them successful is following a list of procedures that form the foundation for their business activities. Here are some key items on that list.
Make a Detailed Plan for the Job
Every successful business requires planning and this starts with a great plan on how to get you from where you are to where you would like to take your project. Real estate development involves dozens of business disciplines working in concert to create a finished product. Along the way, you may interact with thousands of people depending on the size of the project, so keeping everything in order requires planning and an adherence to operating in a very methodical way. If you are not a detail oriented person, this may present a challenge and provide even more the reason for putting things down on paper and working them through before you engage on a project. When you develop this plan be sure to talk with people who are doing what you would like to do to get a real feel rather than a book feel for the project. Ask for their advice and take it to heart because their experience may help you to become more successful.
Have a Good Understanding of the Key Responsibilities
Before you take on a real estate development project, have a good understanding of the key areas. These include buying, development, construction, contracting and selling real estate. You should also understand and build relationships with independent lenders who can provide financing for your project. This business insight, gives you a great understanding of how to get a project done and what to expect when you take it to market.
Know You Limitations
Too often real estate developers take on projects that they are not capable of handling and it ends in disaster. A rule of thumb is to understand that it is likely that for a new real estate developer, you may have ten percent of the important things on the project go wrong. If this happens, could you still bring it to completion? If the answer is maybe not, then you are in over your head. There is no shame in doing smaller projects if this is your actual comfort. There is already a lot of stress in developing real estate, when you add in that you might be operating much of the time over your head, you will end up not getting the result you seek. Most big real estate investors spent extra time developing their skills on smaller projects before they moved to the big jobs. This extra time was used to hone their skills as sharply as possible so when they made the leap they were over prepared.
This is a vital list of important things you need to understand when you undertake a real estate development project. Like any business, learn all you can before you risk investor money. Do your homework and you may become a top real estate developer.