You want to start a real estate development business. What are the key things you need to know?

The most important consideration before starting a real estate development business, from a personal standpoint, can be encapsulated in the concept of Personal Alignment. This concept integrates your readiness, skills, risk tolerance, financial stability, commitment, adaptability, leadership abilities, networking capacity and strategic vision, ensuring they are all aligned with the demands and the industry. Personal Alignment underscores the critical importance of self-assessment in these areas to determine whether you are not just willing but also genuinely prepared and suited to navigate the complexities and challenges of starting and running a successful real estate development business.

All other things being equal, know what the value proposition is. Also, great ideas are a dime a dozen. What matters most is execution. Get it done. An average idea well executed to completion will outperform the best idea ever poorly executed.

I have seen both good and bad developers in the last 10 years. Here's what I have learned from successful real estate developers: - They start with small developments that they understand well. Over 50% of them started with "land subdivision or duplex" projects. - They leverage their strengths and operate within their financial capacity, avoiding overextension. - They rely on borrowing money from banks, avoiding involvement with equity partners as it could eventually cost them more. - They understand how to sell the end product. Before starting a project, they already know the demand and the price of the end product. - They consistently communicate with multiple local agents to enhance their sales approach.

Selecting a niche in real estate development requires a strategic approach. Begin by assessing your strengths, financial capacity, and areas of interest. Research market demands, analyze competition, and evaluate profitability within your targeted locale. Whether it's residential properties, commercial spaces, or specialized projects, aligning your choice with both market needs and your capabilities is crucial. Success hinges on understanding the unique dynamics of your chosen segment and crafting tailored strategies to meet market demands effectively.

Un error común es iniciar solo porque tengo un terreno que quiero aprovechar. La clave es saber que quieres hacer, el modelo, vivienda, oficinas, comercio y a partir de eso ya puedes ver si el terreno se adecua o si es mejor vender ese terreno y buscar otro que si se adecue. Hay que estar convencido que quieres hacerlo y tener muy claro a que nicho vas a enfocarte y no solo por tener aparentemente algo, salir corriendo a montar una empresa.

Es vital hacer un buen plan de negocios donde se establezca todos tus objetivos, FODA, Estados Financieros, ratios etc. Ahora bien, hay que tener claro que como dice la famosa frase, "excel aguanta con todo". No porque tu plan decía se venderá 3 unidades mensuales, significa que si se venden 2 o 4, todo está mal. Si bien el plan es una radiografía completa, lo que debes estar claro son los objetivos finales y luego verás como siempre terminas por ajustar ciertos puntos del plan pero logras llegar a tus objetivos y por ellos es que son la columna vertebral de todo el proyecto.

Crafting a robust business plan is crucial for securing investment, attracting partners, and streamlining operations. Start with a compelling executive summary to highlight your mission, vision, and unique value. Conduct a thorough market analysis to understand your audience and competition. Outline your development strategy from land acquisition to sales. Include a financial forecast detailing costs, revenues, and cash flow. Don’t overlook a risk analysis to mitigate potential challenges. Emphasize the strength of your team by detailing their roles and expertise. This approach not only sets a clear path for growth but also builds confidence among stakeholders.

1) Keep it to the point: No one wants to read a 20-page business plan. In my experience, it is always good to have a 1-2 page summary of what your business is about, keeping everything concise and to the point, without any fluff. 2) Keep your future audience in mind: Your business plan should have a target audience. It should serve as a pitch deck for your bankers or future investors. It is an IM that you showcase your business. 3)Name Drop Your A Team: The team of consultants in your business plans adds more weight and trust factors. Whether you want to build 1000 units or a stadium, the group of consultants that you include in the business plan provides the strongest backup and validation for your future success.

Ein Businessplan ist wichtig, nicht nur für andere auch für dich selbst, aber trotzdem ist nichts in Stein gemeißelt und man sollte immer Arbeit und Belohnungen planen

Building a robust, multidisciplinary team is crucial in real estate development. Engage with skilled professionals across fields—architects, engineers, contractors, and legal and financial advisors—who share your commitment to quality and efficiency. Prioritize expertise and reputation in your selections. Clear, contractual agreements and open communication channels are essential for aligning your team with your project's goals, deadlines, and budget. This collaborative approach ensures a seamless execution of your business plan, setting the foundation for success.

Here is a shortcut on how you can assemble your team of experts: 1) Visit any council website to find Development Applications (DA). 2) Look at the submission documents and find all their names, including architects, engineers, builders, town planners, etc. 3) Compare 10-20 council DA documents and identify the commonly used consultants. This will give you a good indication of the likelihood that the consultant is good at their job!

El equipo es vital, expertos y que les confíes. Rodéate siempre de personas que sepan mas que vos, además muchas veces pasa que los terceros consultores o empresas independientes, no está mal, de hecho para los primeros proyectos puede ser lo mejor. Probablemente sacrificas algo de utilidad, pero te dará un mucho mejor resultado, credibilidad y sobre todo experiencia en tus primeros proyectos. Luego ya sabrás que y a quien necesitas para continuar desarrollando y creciendo, pero ya con experiencia.

Securing financing is crucial in real estate development, demanding a blend of personal investment and external funding. A strong financial history is essential to attract lenders and investors. Diversify your sources: utilize personal savings for equity, seek bank loans for leveraged funds, engage with private investors for profit-sharing opportunities, explore crowdfunding for community-backed support, and leverage government programs for additional benefits. Effective financing strategies balance risk and reward, ensuring project viability and sustainability.

Over the years I've observed that developers who lack financial skills have over a 70% chance of encountering failures in the future. Here's what you should know: - Always have a Feasibility Study ready. This is the most important document that all banks will look at. - Have at least 20% IRR (or higher) of your project as it will show your project viability - Don't forget to exclude GST. Not all financiers will fund GST - Don't forget to include a contingency budget in your feasibility study. It's important to demonstrate that you have a budget for unforeseen expenses. - Talk to your banks as early as possible and understand their funding requirements.

Navigating the complex landscape of real estate development requires adherence to a myriad of regulations. Key to success is securing all necessary permits and approvals while ensuring compliance with zoning, building, and environmental laws. Proactively managing potential legal disputes with stakeholders is also crucial. Staying informed and working closely with local authorities will streamline your development process, mitigating risks and fostering positive relationships. This strategic approach not only ensures regulatory compliance but also paves the way for a successful project outcome.

Hier wird das Geld verdient, alles ist wichtig, aber man muss auch den Deckel auf den Topf machen und seine Arbeit bezahlt bekommen

To excel in the final phase of marketing and selling your units, focus on crafting a unique value proposition that clearly differentiates your offering from competitors. This is key to attracting your target market. Employ a multifaceted marketing strategy that includes digital presence on websites and social media, alongside traditional methods like flyers and events. Price your units competitively, considering costs, demand, and what the competition offers. Adopt diverse distribution channels, from direct sales to leveraging brokers and online platforms.

Pensar fuera de la caja, El Desarrollo Inmobiliario es un organismo viviente, el cual puede verse afectado de forma positiva y/o negativa por circunstancias propias del medio que pueden nacer de forma circunstancial e imprevista, para ello es necesario mantener un pensamiento creativo y abierto que permita establecer propuestas innovadoras, al igual identificar nuevas oportunidades y métodos de trabajo que ofrezcan otras oportunidades de crecimiento del modelo de negocio en el territorio donde será implantado.