Becoming a real estate developer takes dedication, knowledge, capital and the right opportunities. But if you have the drive to create spaces where people live, work and play while also turning a profit, it can be an incredibly rewarding career.
This guide will walk you through the key steps to launch yourself as a real estate developer over the next 12-24 months. Master these fundamentals, and you’ll be well on your way.
Step 1: Understand What a Real Estate Developer Does
Before diving in, make sure you have an accurate picture of what a real estate developer does day-to-day.
Real estate developers identify properties, secure financing to develop the property, oversee the construction of a property, and manage the final property or project. It’s a process that starts with coming up with the initial concept and ends with leasing or selling the finished product.
Specifically, what does a real estate developer do?
- Research market trends and find promising development opportunities in research neighborhoods
- Obtaining financing from banks, investors or other sources
- Buy land or buy property
- Plan and create a vision for development projects
- Responsible for managing design, permitting, construction and leasing/sales for teams
- Budgets, timelines, and compliance throughout the process
- Finance finished residential, commercial or mixed-use developments
Essentially, what is a real estate developer? Someone who can see opportunities, raise capital, bring teams and risk together, and build places where people want to live, work, and play.
Step 2: Build Your Foundational Knowledge
Next, start deepening your knowledge across a few foundational areas:
Learn Real Estate Development Basics
Enroll in courses and programs focused specifically on real estate development and real estate software development services to gain a competitive edge.
Key topics should include:
- Development project phases, timelines and major milestones
- Budgeting and sources of financing
- Market analysis and feasibility studies
- Site selection, acquisition and due diligence
- Design, entitlements and construction
- Leasing/sales and asset management
This foundational knowledge is crucial for understanding what is a developer in real estate and enables you to speak the language of the industry.
Understand Urban Planning and Design
While you don’t need to become an architect or urban planner, take time to understand key concepts like:
- Zoning regulations and building codes
- Principles of urban design and placemaking
- Sustainable building practices
- Market trends in residential, retail and office spaces
This knowledge will help you work more fluently with your teams and identify spaces and designs that will attract tenants/buyers.
Brush Up on Business and Finance
Developers lead complex, asset-intensive businesses. Be sure you have a working grasp of:
- Accounting fundamentals and financial statements
- Microsoft Excel and financial modeling
- Sources of capital and financing options
- Business structures, taxes and regulations
- Management principles
These are the tools to assess opportunities, manage risk and lead your company.
Step 3: Gain Early Experience
There are many ways to start getting hands-on experience in real estate development:
Find a Mentor
A mentor can open doors, make introductions and provide invaluable advice. Look for mentors among:
- Experienced developers in your area
- Professors or guest lecturers from real estate programs
- Family, friends or colleagues already in the industry
Shadow your mentor to understand their day-to-day work better. Soak up their hard-earned knowledge around project timelines, budgets, design, securing financing, working with municipalities and more.
Look for Internships and Entry-level Jobs
Paid internships and entry-level positions are another excellent way to gain early experience. These could include:
- Analyst roles at development firms to learn the financial side
- Assistant project manager roles to support specific developments
- Roles at architecture and design firms to understand that perspective
Use these opportunities to build your network and track record within the industry.
Consider Volunteer Positions
Volunteering with local economic development groups, chambers of commerce or community housing organizations can also provide great insight while giving back. You’ll meet key local stakeholders while learning regulations, market conditions, funding programs and emerging needs in your community.
No matter how you get started, focus on learning by doing in the early years. These real-world experiences will prove invaluable later.
Step 4: Spearhead Your Own Small Projects
Within 2-3 years, aim to spearhead one or two small development projects yourself. This hands-on experience will deepen your understanding of how to become a developer of real estate.
Start with a Small, Low-Risk Project
For your first solo project, start very small. Examples might include:
- Flipping a single property for renovation and resale
- Building a small residential extension or backyard accessory dwelling
- Adaptively reusing an old building for a new purpose
The project should align with your knowledge, experience, budget and risk appetite. By starting small, you’ll limit downside risk as you gain first-hand experience.
Leverage Local Programs and Incentives
Also, look for projects that qualify for local government incentives or financing programs, like:
- Federal historic preservation tax credits
- Local affordable housing funds
- Economic development grants and loans
- Small business support programs
These can make your first project more feasible, though they often come with more paperwork and compliance requirements.
Lead the Project from Start to Finish
While you may outsource certain elements, strive to lead the project from initial concept to completion. Drive the vision, secure financing, manage bidding and construction, and handle leasing or sales.
Completing even a small development project end-to-end will grow your skills exponentially. You can also use the finished project to start building a portfolio and track record.
Step 5: Position Yourself as an Emerging Developer
In your third year or so, focus on positioning yourself as an emerging developer in your locale.
Set Up Your Real Estate Development Company
Formally establish your real estate development business. Your company should suit your mid-term aspirations – whether developing residential subdivisions, constructing commercial office buildings, redeveloping urban industrial sites, or something else.
Before you know it, you should formally structure and capitalize your development company, obtain necessary licenses and insurance, set up accounting systems and have a lawyer review key contracts and agreements.
Grow Your Network
You should also continue to build relationships with brokers, designers, contractors, permitting officials, community leaders, potential financiers and other developers. Describe your development vision and where you are at today.
The more stakeholders know you and see you actively advancing projects, the more they will think of you for new opportunities.
Seek Out Partnerships and Investors
Now is the time to start reaching out to established developers or make independent projects with investor backing.
Having a solid track record with your initial smaller projects will show you have good development skills. Building confidence in your leadership shows you can secure and steward financing.
It will also help to attract the right partners and the right investors for your next, bigger undertakings.
Identify and Secure Your Next, Larger Project
Finally, begin to actively pursue your next, bigger development opportunity using your company, network and resources.
Find projects that are promising yet complex and suited to your skills and create massive value through vision, partnership, public approval and hands-on execution.
With one or two successful larger-scale projects under your belt in the 5+ unit range or 20,000+ square foot range, you’ll be well on your way as a real estate developer.
Conclusion
So, what do real estate developers do and how to become one? Becoming a real estate developer requires dedication over 3-5 years, but the personal and financial rewards can be tremendous. Follow these steps to launch yourself on this exciting career journey:
- Learn development basics, design essentials and key business skills
- Gain early experience through mentors, internships and volunteering
- Spearhead one or two small development projects yourself
- Set up your real estate development company and expand your network
- Secure partnerships, investors and financing for larger projects
Master these fundamentals, and you’ll be primed for a thriving career as a real estate developer. The opportunities to create dynamic living spaces and communities are boundless.
