Investing in real estate, property development, and taking part in the real estate business has become very popular.
Becoming a property developer is just one of the ways people have gained from the estate business.
Today we will discuss how to become a property developer and what it takes to become one. First, let’s identify the role and responsibilities.
A property developer is an entrepreneur who gathers a team to develop the property. Many property developers locate an area to build property and act as the project manager for this project.
Before starting from scratch, many property developers will flip properties.
Flipping properties isn’t as expensive, and you gain the experience and contacts before building a property from scratch.
Many property developers have done these steps in different orders, such as making a plan first or arranging finances, etc. It is up to you where you want to start as long as each step is fulfilled.
First, you want to decide your niche before looking at a location. There are residential projects, commercial properties, and more. By deciding on your niche, helps you see how many opportunities there are in an area.
Throughout the development process, you will need many people. It is best to build a connection with these people because your property depends on it.
Here are a few people you will need, to build your team.
I would recommend getting to know more than one person in each field because you will always need a backup. You need to trust your team, which means references should be checked and establish a constant line of communication.
Next, you want to arrange your finances. First, you need to identify how much money you will need. When you are assembling your team, you need to get an estimated price from each person.
Once you have gathered the total amount, you need to subtract the amount you are willing to pay.
Especially with your first project, since you haven’t made any profit, it will be costly. You can either find an investor who will be aware of every plan and property. Or you can apply for a development loan.
If you are getting an investor or investors, you need to sit down with them and talk about a payment plan. The investors can also help you decide on a timeline or business plan.
Now we have on and off-market strategies to find properties. These strategies will help you pick a property.
On-market strategies, involve looking for properties that are on the market. A lot of investors and developers will use the off-market strategy, which is why they are separate.
Looking on the market means talking to real estate agents, looking online, and seeing a sign that shows if a property is for sale.
Off-market strategies involve a property that is not officially on the market. It could be close to being sold, or you can contact architects in your area for properties that need to be “flipped.”
A flipped property is when a site is acquired and cleaned up to add value to the property.
Mainly, this strategy is done by word of mouth and contacts.
For every property, you need to make a timeline of what is to be completed and when. This step is where communication becomes essential. It is no secret that construction and real estate projects struggle to meet deadlines.
Establish your timeline with your whole team, and make sure to ask them if the timeline is reasonable. If they have any doubts, they need to be shared, so you are not blindsided later.
Now it is time to build your property portfolio! You are ready to start property development. You will have to go through many properties to start building a portfolio and gaining profit.
Here are shared skills that every property developer needs to meet deadlines successfully.
It is crucial to be an excellent communicator. Not only that, but it is essential to make sure you are open to communication. Communication is a two-way street, and your team needs to feel like they can come to you at any time.
Task management falls a bit into project management, but essentially every property developer needs to learn the following.
These habits or skills above will improve your overall task management skills.
This next skill is one of the most challenging. A lot of the work that is being done is not in your control. You are not physically putting up walls, lights, pipes, etc. Thus you are not in control of when work is being done.
Because of that, you need to constantly think ahead of your next step and any backup plans if something does not work out.
Lastly, it is vital to have the skills of a project manager. This skill includes everything I mentioned above, plus knowing how to respond and address problems effectively.
Aside from addressing problems, you will also need to know how to manage your team efficiently. Team management includes being proactive and ensuring that open line of communication.
That concludes the steps to becoming a property developer and knowing what skills it takes. Overall this role takes a lot of patience and can get stressful. Focus on making a valuable property, and the profit will be rewarding in the long run.
My name is Celeste I am a student at Austin College. I am currently pursuing a business degree and interested in entrepreneurship. Before my career, I hope to get the chance to travel internationally.