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How to Get Your Start in Property Development

Property Development

Are you interested in fixing and flipping homes? Building a property portfolio? If so, you will likely be interested in property development. Property development refers to a set of real estate-related activities that includes purchasing land and building homes or facilities. This market can be difficult to break into, so here are some tips to help you get started:

 

1. Articulate Why You Are Doing It

Determining why you want to get into property development is crucial to your success. There are different strategies for developers who do it to save money on personal projects versus those who want to make sizable profits. Always keep your endgame in mind because developing property is not a cheap investment, and you do not want to make a poor decision.

 

2. Brush Up On The Process

Do more than just brush up, actually. Make sure you are familiar with every aspect of the property development process because you will ultimately be in charge of all of it. In order to hire the best people, find the best properties, and get the best prices, you should have a thorough understanding of the development flow that you can use to guide your team.

 

3. Find Your Team

On that note, your team can make or break you as a property developer. If you put in the effort to put together a strong team, you will reap the rewards in terms of work ethic and quality. Check references for potential partners, be upfront about your goals, and ultimately, trust your gut when you are trying to decide whether or not to bring someone onto the team.

 

4. Secure Financing

One of the biggest challenges you will face when getting into property development is securing financing for your project (especially your first project). And even if you do get a loan, the majority of banks will only loan up to 80% of the project, meaning you need to have some money saved up yourself. To increase your chances of getting the loan you want, talk to accountants and financial strategists to develop a solid business plan you can present.

 

5. Think About Your Exit Strategy

Property developers have two ways to make money from their finished properties: immediately sell the property for a quicker, yet smaller return on investment, or hang onto the property for the long haul to grow the value of the property over time. At first, you will likely want to sell the property quickly to pay off the loan and have money for your next project. After you gain some experience, it’s never a bad idea to keep a few investment properties in your back pocket.