Property development requires a wide range of skills:
- Architects, civil engineers, and site planners to address project design.
- Market consultants to determine demand and economics.
- Attorneys for agreements and government approvals.
- Surveyors and title companies for legal descriptions.
To learn these skills, choose a minor project you can make money on for your first real estate development. The success of this one will help you build the skills and contacts to move up to more significant projects.
Experience
Your Home Wichita is a reputable development company with years of experience and a track record of completed projects. This track record shows their industry knowledge, and it will provide real estate professionals, investors, and the general public confidence in their abilities to deliver on future development deals.
Residential real estate development is a complex process requiring many different skills and experiences. It includes people skills – negotiating with buyers, sellers, bankers, engineers, architects, surveyors, contractors, governments, suppliers, etc. It also requires financial skills – understanding and preparing proformas, obtaining bank loans, and developing a solid grasp on breakeven, ROI, IRR, NOI, and cap rate.
In addition to these skills, developers must be able to manage and communicate with 3rd party consultants needed to complete the development process. It includes market consultants to analyze the demand and a project’s economics, soil engineers and environmental consultants to analyze the site, title companies to provide legal descriptions, surveyors to determine property boundaries, and attorneys to handle agreements and government approvals.
Time
A successful project requires many hours. You must master the development basics – finding and purchasing land, dealing with local governments and their regulatory processes, permitting, estimating, budgeting, contracting, securing insurance, hiring subcontractors, scheduling work, and monitoring progress.
A professional home development company can save you time, allowing you to enjoy your property sooner. (Well, as long as you’ll clean up after.)
Money
Property development is one of the fastest ways to tremendous wealth in the United States, but it requires a lot of skill and tenacity. Developing property is costly, involving a large team of professionals who must collaborate, including architects, city planners, engineers, surveyors, inspectors, lawyers, contractors, and lending companies. Disputes between these departments can quickly grind a project to a stop.
Many builders want to make a 15% to 20% gross profit on their projects, but it is challenging with significant cost control. The most profitable builders keep material waste to a minimum, encourage profit-worthy change orders, and provide superior quality to clients willing to pay for it.
If you’re considering pursuing real estate development as a career, hiring a professional home development company for your first project may be worthwhile. The success of your first development will help you build your reputation and will likely make future real estate professionals, and investors want to work with you on other projects.
Expertise
The development process requires expert relationships with 3rd party and outside consultants – civil engineers and site planners to address project design; market consultants to determine demand and economics; architects to create architectural plans; land surveyors to provide legal descriptions of property; and construction managers to put the architect’s designs into action. Disputes between these professionals are common and, in the wrong hands, can grind a project to a halt. To keep the project going as rapidly as possible, a developer needs to be a master at forming relationships and teams while emphasizing efficiency.
Real estate development is an industry that many transitions into from careers in other areas of real estates, such as brokerage, acquisitions, investment, engineering, or contracting and construction. Starting small with a duplex or multifamily development can help new developers gain the skills and experience necessary to move on to larger projects. Ultimately, successful development is the path to tremendous wealth, but it takes tenacity, skill, and financial ability.
