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How to Become a Real Estate Developer
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Real estate development can be a glamorous and rewarding career — if you’re willing to take the time to get the education and training needed to get into it. Learn what it takes to become a real estate developer, so you can turn a vacant piece of land into a high-rise office tower or luxury boutique apartments.
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What is a real estate developer?
A real estate developer is a person or company that oversees all of the people involved in the building or renovating homes, offices, retail centers or industrial sites. These projects may convert vacant land or empty, neglected buildings into new businesses and homes.
Specifically, real estate developers need to see the potential in a piece of land or property, then organize the resources to turn it into reality. They develop a plan that includes finding investors to buy the property, decide what to build or rebuild on that property and find the contractors to complete the project. They predict how much money the new homes or businesses will bring in; developers then manage the construction and ultimately sell the project.
From start to finish, a job could take years to complete, with all of the stages of the real estate development process. Real estate developers have expertise in the following areas:
- Land acquisition
- Market studies
- Approvals and permits
- Project financing and financial analysis
- Building development
- Building renovations
What are the requirements for becoming a real estate developer?
You can start a real estate career right away, but it typically takes a few years and extensive work experience to develop a broad knowledge of all the aspects of real estate a developer handles.
“Many real estate developers have gone to school for an undergraduate or master’s degree in real estate finance, or even an MBA,” says David Wilson, past president of the CCIM Institute.
Certifications and continuing education from real estate organizations like the CCIM Institute, NAIOP or the Society of Industrial and Office Realtors also provide a deep dive.
“I strongly believe the education provided by the CCIM Institute is one of the best places to learn about cap rate, internal rate of return, depreciation, etc.,” Wilson says.
Below is a traditional path many real estate developers take.
Education, Expertise and Experience Needed to Become a Real Estate Developer
|Education||Undergraduate degree in real estate and finance MBA in finance|
|Educational expertise||Certificate or continuing education from: |
A step-by step guide to get into real estate development
The experience and education needed to become a real estate developer varies depending on the individual. However, below are some common steps that many real estate developers take.
Step 1: Get the necessary education
Many universities offer undergraduate, master’s and MBA real estate programs within their business schools, building a strong educational foundation for a real estate development career. Future developers can learn about real estate law, finance, environmental remediation, public policy, urban planning, architecture and other areas of development.
Students may also get project-based experience to add to their portfolios, and internships that lead to building a network of contacts within the industry. “If there is an opportunity to jump into an internship program with a development first, that is always a great route,” Wilson says.
Step 2: Gain experience in real estate
There are typically two paths you may take to get your feet wet in real estate development after graduation.
1. Work for a real estate development company
Top real estate program graduates may get hired as junior development associates at a real estate development firm. Some tasks you might take on with entry-level real estate development jobs include:
- Client communication over the course of a project
- Developing budgets
- Lining up vendors and contractors
- Ensuring projects stay on schedule
- Talking to neighbors near a project
- Working on financial models
- Conducting market research
- Assisting more senior members of the firm
Finding someone to show you the ropes during these types of jobs can be invaluable to growing your real estate development career. “I also highly encourage people to find a mentor in the industry that helps guide them and direct them when it comes to the dos and don’ts,” says Wilson.
2. Work in related real estate fields
Some people choose to become real estate brokers to learn how to put deals together. Others work in building construction, finance, architecture or commercial lending to make contacts and gain experience. Regardless of which real estate field you choose, according to Wilson, a large company can give you access to a bigger pool of experience: “I am a firm believer that if you’re just starting out, there is no better place than a bigger firm where you can learn from multiple people.”
Step 3: Consider additional certification and courses
Many current and aspiring real estate developers pursue additional specialized education to advance their careers. Trade organizations offer numerous real estate development certificates and courses.
Certifications. The CCIM Institute offers the certified commercial investment member (CCIM) designation, as well as a comprehensive Development Specialty Track. NAIOP, the Commercial Real Estate Development Association, offers advanced certificates for commercial real estate development and real estate finance.
Courses. CCIM’s course offerings include a two-and-a-half-day crash course introduction to real estate development, a development workshop, a comprehensive Development Specialty Track program and a formal designation in commercial real estate that can take years to complete. Earning the CCIM pin requires courses in financial modeling, investments, market analysis and ethics, as well as a rigorous comprehensive exam.
The NAIOP offers online and in-person classes, including certificate programs in commercial real estate development and real estate finance.
Getting started as a real estate developer
You’ll need to set realistic expectations for yourself when you first start out in real estate development. “I think there is a mentality that you can graduate from college, become a real estate developer and make $100,000 plus your first year,” Wilson says, adding, “it’s not going to happen.”
You also need to have a strong work ethic if you want to succeed. “Real estate development is not an 8 to 5 job,” Wilson says. “If someone is getting into the business and thinks they can just dabble in it, I would disagree wholeheartedly.”
Here are some tips worth knowing as a new real estate developer:
Build relationships.Relationship building may be the most important factor to success as a real estate developer. “I think the main thing is being able to be a good networker and build strong relationships,” Wilson says. “You do business with people you know, like and trust, and once people know they can trust you and that you’ll deliver for them, they will want to do more business with you,” says Wilson.
Find capital.If you don’t have a substantial amount of cash at first, you’ll need to find partners who will front the money. “Learn the business and co-invest with someone you trust and respect, if you can,” Wilson says. You may also want to start learning what commercial real estate loans are available, and what the qualifying terms are.
Constantly grow your knowledge.Real estate developers study the market to see what it needs, and the design projects to meet those needs. “Learn each and every day about the business,” Wilson says. “Soak in as much knowledge as you can, and remember, no two deals are the same,” Wilson added.
Buy land.Now that you have access to cash, you need to acquire property to build on. You may purchase vacant land or older buildings to rehab or demolish.
Develop a plan and get it approved.Real estate developers study the market to see what it needs, then design a building project to meet that demand. You’ll likely need sign off from the local government before breaking ground.
Build.Once you get approval, you can construct the new building or rehabilitate the older one on your property.
Sell the project.Once the project is complete, selling it becomes the main priority. Getting your real estate license so you can make some extra commission money may be tempting, but it may be better to focus your time and energy on new development deals. “Some developers get their real estate licenses to try and capture real estate fees on transactions, but I have found you really can’t wear two hats,” Wilson says.
How to become a real estate investor with no money
While developers typically invest some of their own money, the bulk of the financing comes from commercial loans, and the majority of the equity in the project comes from investors. These investors could be real estate investment trusts (REITs), pension funds, private equity firms, family offices and other private investors.
You may be limited to private lenders and “angel” investors at first, including successful older friends and family members looking to diversify their retirement income. Private investors may also find the social value of a project appealing, such as affordable housing development.
The average real estate developer salary
Real estate development can be a high-paying field, but salaries vary depending on your experience and job type. The table below shows the annual median salaries of retail development and construction positions listed from the most recent real estate compensation survey compiled by CEL & Associates, a real estate consulting company.
|Job title||Median annual salary|
|Top development executive||$297,600|
|Senior development manager||$194,400|
How real estate development has changed since the pandemic
Real estate development was heavily impacted by the COVID-19 pandemic. Although things have begun to return to normal, being in front of people has taken on a whole new meaning, and cultivating and maintaining relationships is even more challenging.
“With the in-person piece diminished, you’re really having to put those networking and relationship-building skills to work to achieve the same connection via online channels,” says Wilson.