6 Ways to Build a Career in the Real Estate Development Business
This is an article I wrote last year, and has received more attention and likes on BP and LI than any other article I've ever written. I wanted to post it again, driven by a recent message I received from a gentleman named Luke Emblem (look him up on LI). Luke emailed me this:
"In the last 7 months I have managed to gain an internship at a small Real Estate Development/Student Housing Company in my college town. I work 20 hours a week and have thus far been exposed to re-zoning,site plan control, landlording, managing and getting bids from contractors, valuation and a myriad of other miscellaneous tasks.
I got this job by taking your advice and reaching out to local Developers, I sent cold (personalized) emails to 15 companies and ended up going to lunch with my current boss and hitting it off. This summer I'm taking on a more active Project Manager type role with the company, working full time as I don't have school.
I want to thank you for the great content that you put out, it's been truly helpful and I've surprised my current boss several times with the knowledge and insight that I have gained from your posts. I enjoy the way you lay out your expertise in an easy to understand manner and appreciate the fact that you put it out on such a public platform....
Regarding your question on the knowledge that I gained from your posts that surprised my boss, the most memorable moment was during my interview. He asked me what I thought developers did and I was able to correctly identify the different phases of a development in my answer - this knowledge came directly from your thread on the Cedar project. I made sure to emphasize the role of zoning, the difference between building "by right" and "entitlement" and the risk/reward that comes with both options. This impressed him, and sparked a conversation on the significant NIMBY movement in our town."
The main thing I want to highlight, is that if you want to start and build your career in the RED business, you have to build your base of strategic knowledge and your identity in the RED business. To do either of these, you need exposure to the business in real working environments, and for that you must make powerful offers to work for others that raises you above the crowd to get hired on, and you must make what I call - an uncommon offer. An offer that rises above the numerous people who say they want to start, but never do....so here's the article again. I am hopeful this will spark a vigorous conversation about beginning in the RED space.
6 Ways to Build a Career in the Real Estate Development Business
by Scott K. Choppin
In my daily conversations and interactions online, I get the question almost daily of how to break into the real estate development business. Whether you are just deciding on your career, or are a seasoned veteran looking to make a move, this post was written to provide value in your efforts to build a career in the development business.
Get the right college degree
While there are many paths to a career in the real estate development business, one of the first things to do is focus on the right college degree. While being a developer does not require a degree, to get the right first job, does.
The following degrees are often in the background of those who have entered the business:
City and Urban Planning
Build your networks early
Build your networks early, either during college or once you enter the business. To build your networks, and facilitate choices for your first job (see below)
- Local industry networks, including local builders exchange, local and regional homebuilders association. An example in California is the Golden State Builders Exchange. Occasionally they will hold local mixer events, market updates, or hold monthly meetings.
- National industry networks, such as homebuilders and multi-family associations. Examples would be the National Multi-Housing Council or the National Association of Home Builders (usually affiliated with local HBA’s per above). Many of these national groups have regional student chapters. The national groups will hold annual meetings, and regional conferences.
- Attend local real estate meetups. While these are mostly made up on investors, these investors most likely know local developers. You can find meetup that are happening on a weekly basis in larger cities.
- Attended real estate conferences. An example in California, is the Pacific Coast Builders Conference. Search for your local or regional conference.
Your goal here is to meet as many people as you can, and gently let them know you are seeking a position with a real estate development company, and ask if they might know of anyone. A powerful way to approach anyone is the indirect approach: “Do you know of anyone who might be looking to hire or that is seeking an intern?”
Get the right first job
As a developer in training, you want a first job that exposes you to the maximum amount of the development cycle with the maximum possible learning velocity (time and speed). You will need to learn all of these components of a development deal: land acquisition, site selection and sourcing, zoning and entitlements, architectural design management, deal underwriting, financing, construction, leasing, property management, and sale or asset management.
I would suggest working for companies that already develop the types of projects that you are ambitious to build in the future. One word of caution, don't take a first job that is oriented around construction or construction management, I have found it very hard for folks to move from construction to development without some loss of career traction to do so.
For example, I come from a family of real estate developers, but I was ambitious to learn rapidly and work for others in the multi-family development domain, so I obtained my first job (asst. project manager) for a division of KB Home (Kaufman and Broad Multi-Housing) that developed in-house apartment projects. I started as a rookie assistant project manager, and left there as a seasoned senior project manager running the entire project myself from finding the land to putting the project into long term asset management phase. This gave me the exposure to all aspects of a development deal on multiple larger ground up development deals.
Your likely job title will be: assistant project manager, analyst, development associate. Whatever it is, you will be working for a more seasoned project manager or senior project manager.
To find companies, search in your local area:
Google search for news about company activities, company announcements, new projects, public hearings, phase releases (new units released to the market), new hires or promotions.
Google search and look for advertising for new projects selling or renting units and identify the developer.
Get a development internship
An alternative, if you are finding a job a challenge, offer yourself up as an intern for a small development company, with the express purpose of gaining development experience, or at least that's how you should communicate it to them. You may have to work for free or at low cost to the small company, as they will be very sensitive to cash flow and costs.
Get a mentor
This is the single most important part of the advice in this article. A mentor could be someone you work for at a company, a senior project manager or VP of development. It could be someone you intern for, or just an individual that you have met and attracted into your network.
Know this: that person is worth their weight in gold, and can be the primary person that you run things past or ask questions as you move through your day. They can help you move up rapidly, and avoid pitfalls in your career. Development is a complicated business, the more knowledge you can acquire with more velocity improves your ability to increase your income.
Personally, my best days were when I would be tasked with managing a project (or part of it) and could at the end of the day ask a TON of questions about how to do it, what happened, what went wrong, what could be done better, and what could be done better than anyone else. I used to carpool home with a very seasoned PM, and we would be in the car together for 1-2 hours each day, and that poor guy got squeezed dry like a sponge by me for knowledge and information. He and I still laugh about it today, but that was the best learning I ever did. I have made a point over my career to ask questions all the time, to everyone I can. You’ll learn to ask them professionally as you hone this practice. Be open to learning for your entire career, the speed of change in all markets today demand constant and never ending learning.
Give yourself plenty of time to build your career
One caveat, building your career will take some time. Development as I said before is a complicated and a risky business; there are many facets to what we do daily, and you want to give yourself the time to learn it thoroughly. Mistakes here can be truly costly. Think of Malcom Gladwell’s 10,000 hour principle, that it takes this amount of time to become “expert” at something.
Be ambitious, be strategic, move first, move fast, persist.