Becoming a real estate developer requires years of experience, but the end result can be both professionally and financially rewarding. If you’re reading this, you might be a real estate agent or broker who is looking to shift your career toward a real estate developer path. Having experience in real estate is important when looking to become a real estate developer but there is no rulebook that limits who can become a real estate developer and no single path to achieving a successful career in real estate investing. So even if you don’t have a formal background in real estate, don’t let that stop you.
Here’s what you should know before heading down the real estate developer path in your career.
What does a real estate developer do?
Before getting started, you should have a full understanding of the responsibilities of the job. A real estate developer job description includes:
- Scout land for projects
- Renovate existing buildings
- Manage construction details
- Negotiate deals
- Fund projects
- Obtain permits
- Attend public hearings to get public approvals
- Oversee projects from start to finish
- Dream up and execute real estate projects
What experience do you need for real estate development?
There is no single path to becoming a real estate developer, but certain areas of expertise tend to funnel into the profession. Construction, architecture, law, finance, urban planning and established real estate professionals can all get into real estate development with the proper knowledge and preparation. You should plan to get your real estate license. It’s also helpful to have a bachelor’s degree in real estate, business, finance or a related field. The ability to plan and organize projects, general knowledge of real estate and an entrepreneurial mindset are all important skills to become a real estate developer.
What are the different paths within real estate development?
Real estate development jobs are tiered based on experience. Some entry-level positions include:
- Real estate sales associate
- Architectural designer
- Asset management specialist
- Developer Analyst
Middle tier positions include:
- Project manager
- Real estate analyst
- Real estate broker
- Senior consultant
Top level, or executive, positions include:
- Principal product manager
- Senior investment analyst
- Chief Risk Officer
- Director, strategic accounts
There are many different career opportunities that fall under the real estate developer umbrella. Find a niche within real estate development, talk to people who work in that field and pursue a fitting path once you’ve explored your options.
How much you can earn as a real estate developer?
Because real estate developers usually have the highest risk in any given project, they also have the highest reward. The size and scope of the development project influences pay, as does geographic region, residential vs. commercial projects and the state of the real estate and land market. A real estate developer can make millions of dollars if involved in a project with a big price tag, but their offers are highly dependent on the market and success of each individual project.
What are the daily responsibilities?
As a real estate developer, you may have to get used to constant chaos. That being said, for those who don’t want a typical desk job, facing new situations and challenges on a daily basis can be thrilling. Daily responsibilities include:
- Visiting land plots and properties
- Balancing the books
- Meeting with workers, contractors and investors
- Responding to press outlets and local organizations
- Scheduling and time management
- Ensure that buildings and properties are up to code
- Researching new projects
Do you need a lot of cash to get started?
You do need capital to get into real estate development, but you don’t have to have it yourself. Most real estate developers finance projects with an investor, personal or bank loan. If you’ve never received financing for a real estate project before, you’ll most likely need to work on creating a business plan to present to investors or lenders. If you’re taking out a business loan, make sure you shop around to compare rates so you can get the best deal.
How to get started on the real estate developer path
Now that you understand the role of a real estate developer, it’s time to make your first deal. Here’s how.
Step 1: Select a location
Do research on your desired area to develop and the real estate niche you want to fit into. Will you focus on residential projects or commercial? Does the market present any great opportunities right now for investors? Will you be partnering with others in a market you’re less familiar with? Selecting a location is about committing to a niche, market and strategy as much as it is about finding a good deal.
Step 2: Build a trustworthy team
As a real estate developer, you will be working with and relying on a lot of different people. From other developers to real estate agents to lawyers to architects to plumbers to day workers. Check references and communicate your expectations for their work.
Step 3: Find an investor or arrange financing
Unless you have capital saved up, you’ll also need to find an investor to fund your desired project. You can find one by arranging a meeting, expressing your needs and showing them the return they’ll be making by joining your project.
If you prefer to take out a business loan, you’ll need to make a strong case to your lender about the stability of your business plan. They may also want information about your company’s finances, your credit and any outstanding debts or bills your business currently owes.
Step 4: Make a timeline
It’s no secret that real estate projects historically struggle to meet deadlines. Holding every person involved to a hard deadline, all the while budgeting in some wiggle room behind the scenes is a smart way to make sure the job gets done on time.
Step 5: Get the word out
Building buzz starts before the project is done! Get the surrounding community excited about what you’re working on by contacting local press outlets or hosting a big event and inviting neighboring residents. Highlight what your project will add to the community to speed up the process of the sale when that time comes.
Build your brand for future projects
As in any profession, the success of one project is your audition for the next. It’s a good idea to start small, learn from developing real estate for the first time and go bigger once you fully understand the process. Once you’ve done work that speaks for itself, real estate professionals, investors, and the public alike will want to work with you on future projects.