Many a
time the popular question for those who wants to make career as a developer is,
‘how do I get started as a developer, as real estate agent and so on? It is
usually followed by a string of other questions which amount to; Could you just
draw me a map that will guide me through every detailed step to becoming a
developer? Many people may choose to undergo trainings in project development
while others will like to undergo an apprenticeship just to learn the art and
begin operation.
Others
who have enough money usually open an office and employ professionals who may
not have enough money to register and establish an office to run for them.
Still, others choose to enter into partnership with the professionals to run
the business. People who are interested in this line of work come from a wide
range of starting points. A lot of them
already have a fair amount of skill in one aspect or another of the built
environment. They have been a contractor,
broker, planner, activist, architect, or property manager. They know enough about how things work to
recognize that they have a lot to learn outside of the field that originally
led them to development.
Some
experts have categorized these groupings variously to include but not limited
to site selection, urban design, site planning and civil engineering. The price
paid for securing land is the single most critical variable in beginning stages
of a real estate project. Therefore, understanding what the site can and cannot
do and how a building sits on the site to create value are paramount
considerations. These four skills help a developer compare many sites against
each other, fit in with the neighborhood, and deal with soil, water and utility
conditions. There is what is referred to entitlement that refers to what the
owner of the land is entitled to do with it, which is typically governed by the
local municipality’s zoning code. A developer must evaluate what can be done
with a site under the existing rules of setbacks, parking requirements,
building size and height – or measure the risk associated with changing its
classification or getting a variance. Equally as important as the written word
is knowing the people who administer the processes involved in obtaining
approvals.
There
is the real estate deal structure, pro formas and finance that takes care of
the money and contracts, the heart of any real estate project. In a typical
arrangement, the project has an operating partner, the person in charge of the
whole process, and a capital partner, the person supplying seed money for a
percent return on their investment. Together, they will seek additional
financing from a bank or other entity in the form of a loan. A pro forma is a
spreadsheet that tracks how the development makes money in rent or sales and
how that income is distributed to its partners and the bank. We still have
those whose specifications are to do the building designs.
These
people are known as the architecture, electrical, mechanical and structural
engineering, etc. This is the know-how that makes a building perform well and
be dignified. A deep understanding of building codes can help the small
developer optimize the size and functionality of individual units while
avoiding costly construction methodologies or mechanical systems. Context
appropriate exterior detailing and quality material selection can both gain
favor with the neighbors and help the building stand the test of time.
The
Construction and construction management is another segment in the lot. There
are two key groups who make the construction or renovation of a building
happen: skilled tradesmen and project managers. Leveraging the knowledge and
work effort of the electricians, plumbers, welders, carpenters, roofers and
installers is either a general contractor or construction manager. Regardless
of the size and type of project, small developers need to carefully manage the
process and risks involved in construction with thorough planning and
contingency reserves. The marketing, sales, leasing and property management are
other groups one can major in. Once you have a building, it must be sold or
frequently leased and maintained. Real
estate agents and brokers handle many of the steps to attracting tenants or
buyers and prepare the appropriate paperwork to ensure qualified applicants. If
the developer is retaining ownership of the property, someone must answer the
calls to unplug toilets and plan for big replacements like water heaters and
roofs. That’s the realm of a property manager.
Project
and business management is also a critical aspect and also very cardinal in the
built environment sector. There are many details to keep track of and people to
communicate with to make a real estate project move forward. Also, someone
needs a good handle on business finance to guide the cash flow throughout the
lifecycle of a project. The small developer needs to make intentional decisions
about where along the development process they will make money and structure
their tax and business arrangements to maximize those positions. Very few
people master all of those skills. If you start with small projects, you can
gain an overview, and understanding when they are needed at the various stages
of a project.
You
get a sense of the basics for each skill set.
If you don’t have the skill which the project requires, you can’t go
without. So you should borrow or rent
the needed skill. Look for people who
are genuinely interested in your project and who are actually happy to teach
you about their specialty. A developer
does not have to know everything, but they should have a good idea who to call
or team up with before it is too late. (SUN)
No comments:
Post a Comment