I'm looking to learn about real estate development from commercial to residential projects. I'll be moving to the Tampa, Florida area and would like to shadow and be mentored by someone who has experience in the field. I'm currently learning about real investing but development is my ultimate goal.
For your first one, I would highly suggest hiring a builder and paying them to build your project. Watch the checkbook and the project. Drive the schedule, and the feedback will be a learning experience. Learn from someone who has already done it and knows how. New construction is very capital intensive, so mistakes can be costly. It can also be very lucrative.
@John Blackman Ok I will definitely keep that in mind. What's your experience with new developments? What works and what doesn't?
@John Blackman What has helped you learn the most about real estate development?
@David Battle Over $100,000 in mistakes across about 20 projects. There is no substitute for experience. I have been fortunate enough to make mistakes small enough or have margins large enough that I still made money on all of my deals. Actually doing the deal is going to teach you the most. Everyone starting out is going to pay some dumb tax. I have paid my share and probably still have more to go.
The main thing you need to know is what it really costs to build the whole project, not just the house, and what is selling in your market. You should be able to make at least a 20% gross margin between the cost of the dirt/plans/house and the sales price after commissions. The better you understand those numbers, the more likely you will be successful.
@John Blackman How did you come across your first project? Is there a book that's helped you out a lot that I could read until I'm able to obtain experience?
I came across my first project via meeting another investor as a real estate club that needed money to get it done. So I partnered up with him to bring cash and debt.
Books are great, but most of your learning will be done in working with others.
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