Advice for someone wanting to get into real estate development

[Lakyra Muenzhuber]

Hello,

I am new to investing and real estate as a whole. I'm currently in college with the goal to be a real estate developer, so how should I go about finding the capital, raising funds, working with experienced investors, and getting started?

If you have done commercial development what information or advice do you wish you had before your first deal?

[Wale Lawal]

@Lakyra Muenzhuber

You can become a real estate developer through several channels, although you will need to take certain steps to make sure you have the licensure and experience needed to achieve success. Follow these steps to become a real estate developer:

1. 1. Earn a degree.
2. 2. Get your real estate license.
3. 3. Gain experience.
4. 4. Build a network.
5. 5. Learn how to manage finances.
6. 6. Understand your market.
7. 7. Understand contracts.
8. 8. Consider becoming certified.

Read this blog for more information https://www.indeed.com/career-...

All the best!

[Andrew Moore]

I started my career as an accountant for a small real estate development company in Chicago that developed mixed-use residential buildings. The owner of the firm illustrated the real estate industry to me by drawing a pyramid. The bottom of the pyramid is the least lucrative & the top is the most. The bottom rung included professions like property management & real estate agents, while at the top of that pyramid was real estate development & syndication. 

Everyone may have their own opinion of where different professions fall in that diagram compared to others. However, my point here is that there are a number of different ways that you can get into that space. I've worked with developers who started their careers in the financial sector; I've seen developers get their foot in the door at a development firm where they can grow and learn the process of development without risking their own capital before going out on their own; I've seen individuals graduate high school, get their real estate license, and create strategic relationships with individuals in the industry and utilize those relationships to get into the development space. 

To piggy back on what @Wale Lawal said above. Getting a real estate specific degree, a finance or Accounting degree, or Economics degree (among many other types of degrees), may prove to be beneficial in giving you a base level of understanding to hit the ground running once you graduate. 

I think your first question was backwards, meaning it should be in this order -> getting started, working with experience investors, raising funds & finding capital. I believe the best way to put yourself in a position to work with and learn from experienced investors is to show that you have a conversational understanding of real estate, and a desire & willingness to grow. I recommend getting started by being an absolute sponge. Read every book that you can, engage in the forums, watch youtube videos, practice analyzing deals, and get to a point where you feel comfortable communicating with other investors. 

Once you have that foundational understanding & can have thoughtful dialogue with other industry professionals, I think it is much easier to network with experienced investors who might be willing to mentor you or partner on a deal. Once you have established working relationships & a track record of success/competence it is much easier to approach private investors with opportunities they may be willing to provide capital for.

You are in a great spot as you could look for summer internship programs with real estate development firms, or an analyst program for a company like Cushman & Wakefield (or other similar companies) where you may start to understand how to analyze or value larger assets.

I love the clarity you have at this point in your life, and wish you the best of luck! With a continued desire to learn and grow I think you'll be able to make it a reality.

[Barry Ruby]

@Lakyra Muenzhuber Step 1 without a doubt is to learn how to determine and properly underwrite the highest and best use of a property.

Without this ability, site selection, valuation, cost, income, Op Ex, capital stack, equity and ownership splits and entitlements will be and remain a mystery to you.

The shortest distance between where you are and becoming a developer is to jump in by actually doing a small project yourself or finding a developer to teach in you in real time with a real project or finding a course associated with a mentor.

Alternatively, you can enter the trade by taking up a role in one of the many trades and professions involved with development. This will lengthen the time needed to get the full picture and is a choice I would not recommend or follow myself.

No matter what you choose to do, learn the language, the metrics and how they function and get your hands on or build a ground up pro forma.

I will be happy to send you some snap shots of the kind of tool you need if you like.

Just let me know how to get it to you and if you want or need any help with understanding it.

Wishing you the best on your journey.

[Lakyra Muenzhuber]

thank you all so much this was really helpful! 

[Barry Ruby]

Hi Lakyra,

Feel free to call me anytime you have a question about development.

Barry Ruby

303.921.9308

[Drew Sygit]

Go work for a development company part time and/or summers - even for free as an intern.

[Jennie Berger]

Quote from @Andrew Moore:

I started my career as an accountant for a small real estate development company in Chicago that developed mixed-use residential buildings. The owner of the firm illustrated the real estate industry to me by drawing a pyramid. The bottom of the pyramid is the least lucrative & the top is the most. The bottom rung included professions like property management & real estate agents, while at the top of that pyramid was real estate development & syndication. 

Everyone may have their own opinion of where different professions fall in that diagram compared to others. However, my point here is that there are a number of different ways that you can get into that space. I've worked with developers who started their careers in the financial sector; I've seen developers get their foot in the door at a development firm where they can grow and learn the process of development without risking their own capital before going out on their own; I've seen individuals graduate high school, get their real estate license, and create strategic relationships with individuals in the industry and utilize those relationships to get into the development space. 

To piggy back on what @Wale Lawal said above. Getting a real estate specific degree, a finance or Accounting degree, or Economics degree (among many other types of degrees), may prove to be beneficial in giving you a base level of understanding to hit the ground running once you graduate. 

I think your first question was backwards, meaning it should be in this order -> getting started, working with experience investors, raising funds & finding capital. I believe the best way to put yourself in a position to work with and learn from experienced investors is to show that you have a conversational understanding of real estate, and a desire & willingness to grow. I recommend getting started by being an absolute sponge. Read every book that you can, engage in the forums, watch youtube videos, practice analyzing deals, and get to a point where you feel comfortable communicating with other investors. 

Once you have that foundational understanding & can have thoughtful dialogue with other industry professionals, I think it is much easier to network with experienced investors who might be willing to mentor you or partner on a deal. Once you have established working relationships & a track record of success/competence it is much easier to approach private investors with opportunities they may be willing to provide capital for.

You are in a great spot as you could look for summer internship programs with real estate development firms, or an analyst program for a company like Cushman & Wakefield (or other similar companies) where you may start to understand how to analyze or value larger assets.

I love the clarity you have at this point in your life, and wish you the best of luck! With a continued desire to learn and grow I think you'll be able to make it a reality.

 ☝️THIS.☝️ End of story. 🙏

[Julie Nealey]

Quote from @Barry Ruby:

@Lakyra Muenzhuber Step 1 without a doubt is to learn how to determine and properly underwrite the highest and best use of a property.

Without this ability, site selection, valuation, cost, income, Op Ex, capital stack, equity and ownership splits and entitlements will be and remain a mystery to you.

The shortest distance between where you are and becoming a developer is to jump in by actually doing a small project yourself or finding a developer to teach in you in real time with a real project or finding a course associated with a mentor.

Alternatively, you can enter the trade by taking up a role in one of the many trades and professions involved with development. This will lengthen the time needed to get the full picture and is a choice I would not recommend or follow myself.

No matter what you choose to do, learn the language, the metrics and how they function and get your hands on or build a ground up pro forma.

I will be happy to send you some snap shots of the kind of tool you need if you like.

Just let me know how to get it to you and if you want or need any help with understanding it.

Wishing you the best on your journey.

 What area of development are you in? Residential, commercial, mixed use or multifamily?