Real estate development can be one of the most lucrative business ventures anyone can start, with the potential for huge profits over a period of time. However, for those who don’t learn the ins and outs of the real estate world, huge losses are also a possibility. To make sure you are very successful as a real estate developer, follow these important steps.
The best developers attend college and earn degrees in business administration, finance, accounting or construction management. In addition, take real estate classes and obtain a real estate license for your state. This will give you credibility, as well as teach you how to spot market trends and capitalize on opportunities.
Work for a Real Estate Agency
Many of the best developers begin by working for a real estate agency, listing and selling properties as an agent. This lets them work with experienced brokers and developers, gaining even more insight into the business.
Establish Your Business
Once you’ve built up enough money to begin purchasing properties, establish your development business as a legal entity, such as a limited liability company. This will protect your personal assets in the event the business takes a downturn, enabling you to keep business and personal finances separate.
Build Relationships with Construction Firms and Lenders
No real estate developer is successful without having a good network of construction companies and lenders on which they can rely for services. Construction companies can offer quality work for lower prices once they know you, and lenders can offer competitive rates if they are confident of your upcoming projects.
Use the Internet
With its vast array of specialized websites, the internet can be a great way to spot market trends and stay on top of the most profitable opportunities. By using various real estate tools online, up-to-date information on prices and other factors can be used to know which properties are hot and which one are not.
Reinvest Your Profits
Above all, don’t get carried away after that first big deal pays off in profits. Rather than going on a spending spree, reinvest the money into the business and purchase additional properties. This will give your business additional stability, as well as help it grow at a faster rate.
By following these simple steps, you may find yourself with a real estate empire rivaling that of Donald Trump or other icons in the business world.
Roman Temkin is a real estate developer and an entrepreneur from NYC.