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How to Become a Real Estate Developer

28 February

#Architectural tips #exterior rendering#interior rendering

There’s more to the real estate industry than selling homes. You could design and build them by becoming a real estate developer. It’s a great choice for people from business, finance, and legal backgrounds. This career includes designing and managing the building of property. It’s a diverse field with growing housing demand. Becoming a real estate developer isn't easy. All you need is a relevant degree, experience, and a certification. 

What Does a Real Estate Developer Do?

Real estate developers work in the property development industry. They manage the development and sale of real estate. Real estate developers do the following: 

• Purchasing land
• Financing real estate transactions
• Working with builders to design and construct buildings
• Determining how to market real estate to customers

Real estate developers take the most risk in a real estate project. They decide which property to invest in and how to manage construction. Real estate developers specialize in different property types. Some focus on commercial property, others on residential. Some even specialize in certain parts of the development process. 

For example, a developer could specialize in scouting for land. They find the best land to build a specific type of building. And they work with contractors to build the property. On the other extreme, some developers build properties from start to finish. This includes finding the land to oversee its construction. 

Most real estate developers work with other professionals, including: 

• Engineers
• Architects
• Contractors
• City planners
• Surveyors
• lawyers

Where Does a Real Estate Developer’s Career Begin?

Many real estate developers start as real estate agents. They help clients buy and sell homes. Then they use their knowledge of the industry to become a developer. But that’s not the only path. Developers even come from construction, finance, and urban planning backgrounds. 

You need to meet certain requirements to become a real estate developer. Firstly, you'll need a relevant college education. It could be in law, finance, business, or engineering, etc. You'll need a state-issued real estate license depending on your location. And depending on your desired role, you’ll likely need other certifications. 

The Main Stages of Becoming a Real Estate Developer

You can become a real estate developer through multiple paths. Regardless of which one you choose, you'll need the relevant license. 

These are the 8 general steps to becoming a real estate developer

1. Receive a bachelor’s degree
2. Receive the relevant real estate license
3. Gain experience in the real estate industry
4. Build a network in the real estate industry
5. Learn how to manage your finances
6. Understand your market
7. Understand the legality of real estate development
8. Get certified as a real estate developer 

1. Earn a bachelor’s degree

You need a bachelor’s degree in a relevant field. Business, construction, finance, or law, can be relevant, for instance. It’s not necessary to enroll in a program specific to real estate. But your degree should prepare you for the duties of a developer. 

You could get a Master’s Degree in Real Estate Development. This qualification would give you better credentials than your competitors. 

2. Earn your real estate license

You need a real estate license to work as a developer. You’ll obtain this license by giving a state-issued exam. It’s advisable to earn your real estate license as early. 

3. Get experience in the real estate industry

You should gain experience in the real estate industry. The more you gain, the better you’ll understand the industry and build connections. Like many other developers, you could start as a real estate agent. That way you'll gain plenty of industry experience and knowledge. 

Another option is to work for another real estate developer. That way you’ll learn more about the trade and gain inside information. 

4. Build a network to establish yourself

Networking is essential for any career in the real estate industry. You'll want connections with lenders, marketers, and lawyers. They'll help you build, market properties, and write legal documents. A large network also helps you find potential clients. 

You can network in the real estate industry by doing the following: 

• Joining professional real estate groups
• Attending local real estate-related events
• Speaking to people you may already know in the real estate industry. 

5. Know how to manage your finances

Financial planning is the most important skill for real estate development. Every developer needs to manage the finances of a project. You can learn financial planning through college or by taking an online course. The goal is to know how to financially manage a project. 

6. Develop an understanding of your market

 The real estate market varies widely depending on where you want to work. For example, large cities have extremely competitive markets. Residents and businesses regularly buy new properties in these places. Conversely, most rural and less urban areas have less competitive markets. You want to know your market. 

The best way to achieve this is by researching your local market. Learn local prices, market behavior, and market preferences. The better you know the market, the better you'll know where to specialize in. 

7. Develop an understanding of legal contracts

 Real estate development involves large numbers of legal contracts. You must know how to read, understand, and write these documents. Do so by taking a course in contracts from your local college. Your goal is to easily write and review legal documents.

8. Get Certified

You may not need certification as a real estate developer. But it helps You’ll look more qualified with better credentials. For example, the Realtors Land Institutes Accredited Land Consultant credential is a top certification.

To receive this certification, you need:

• To hold an active real estate license
• Have three years of experience in development, brokerage, or sales
• Join  the Realtors Land Institute
• Complete courses at the institute’s university
• Pass an official exam

You could also obtain any of these certifications: 

• NAIOP: National Association of Industrial and Office Parks certificate of advanced study in real estate
• SRS: Seller Representative Specialist
• CCIM: Certified Commercial Investment Member
• GRI: Graduate Realtor Institution 

Pros and Cons of the Work of a Real Estate Developer

These are the pros and cons of working as a real estate developer 

Pros

• High-income potential
• Many professional certifications are available
• The opportunity to improve economic growth in your local area
• The growing population means increased housing demand

Cons

• Professional growth is dependent on economic stability
• You need to be highly educated for many positions
• You need state licensure to work for a real estate brokerage
• Long working hours
• Extensive travel may be required 

The Average Salary of the Developer

The average real estate developer earns $83,478 in the United States. Your earnings depend on your position, experience, and earning arrangements. Most developers work on commissions, so they earn from every deal they close. 

Your earnings could vary from as low as $24,000 to over $135,000. Most developers earn between $45,000 and $100,000. But you can earn more with better qualifications and skills. 

How Long does it Take to Become a Real Estate Developer?

It takes seven years on average, to become a real estate developer. It may take fewer or more years depending on your qualifications. Most people take 6 months in person or 8 weeks online to secure a license. The exact amount of time to gain the license depends on where you live. 

Useful Modern Literature for a Real Estate Developer

The best way to become a developer is to understand the industry. And the best way to understand the industry is to do your research. Study the real estate development process. as a whole. Also, learn about the key players of a complete development cycle. 

You’ll also want to learn about local real estate regulations. Most municipalities have guidelines on what and how you can develop. You need to know these guidelines. A good place to start is with your municipality’s future land-use plan. You can also check out the following books for a helpful start. 

1. Be a Successful Residential Land Developer by R. Dodge Woodson

Dodge Woodson's guide teaches you how to find and buy high-value properties. You'll also learn how to review real estate and recognize good properties. This book also teaches you step-by-step how to buy land and build properties. 

2. How Real Estate Developers Think: Design, Profits, and Community by Peter Hendee Brown

This book was based on a hundred interviews with real estate businesses. Brown's focus is on what successful developers do. It's an excellent read to understand day-to-day development. 

 

 

 

 

3.The Book on Flipping Houses: How to Buy, Rehab, and Resell Residential Properties by J Scott 

This book is like a short-hand guide to real estate development. It'll briefly teach you the ins and outs of the profession. You'll learn valuable strategies and essential development skills. The most important thing this book teaches you is how to manage development. Scott beautifully illustrates how to financially manage development.

 

 

 

4. Making it in Real Estate: Starting Out as a Developer by John McNellis 

John details his 35 years of experience in this book. He offers an insightful read with detailed insider knowledge. He explains how to make good deals, get financed, and deal with other professionals. It's a detailed book that gives excellent information. 

 

 

 

 

5. Real Estate Development – 5th Edition: Principles and Process by Mike E. Miles, Laurence M. Netherton, and Adrienne Schmitz

This is one of the most detailed books on real estate development. Mike covers the entire development process from start to finish. He explains everything from designing, financing, and marketing buildings.