What does a real estate developer do?

What does a real estate developer do?

The real estate field offers many opportunities to do business. That’s why we want to help you understand what a real estate developer is and what he does.

In this article, you will also find the step by step of the functions of a real estate developer.

We invite you to read it carefully.

What is real estate development?

It consists of the management and coordination of different agents and activities that are necessary for the creation of real estate.

The objective of real estate development is to satisfy a building’s needs

In this sense, the real estate developer is a promoter, who is in charge of finding an unsatisfied building need to satisfy it. 

What does the real estate developer do?

Its specific function is to visualize a project, plan it, take its visualization to paper, to finally take it to physical property.

He is responsible for all aspects of the project, that is: 

  • property acquisition
  • Zoning, layout
  • engineering
  • The foundership
  • construction
  • The sale or lease of the property

Due to its functions, it is necessary for the real estate developer to develop skills, which we will talk about in the next segment, and to accumulate experience. 

The final result of your management can be very rewarding at a professional and economic level. 

To perform their functions, the real estate developer must accumulate experience in real estate, first of all, it is the most recommended, although currently no regulation limits who can become a real estate developer. 

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As for the equipment that is needed, a computer and a smartphone are enough. However, another of the activities that will have to be carried out, off the screen, are: 

  • Explore land for projects
  • Renovate existing buildings
  • Manage construction details
  • Negotiate agreements
  • Get building permits
  • Attend public hearings

You will also have to build projects, eventually, to have them as an investment, in other cases, you will be able to build projects to sell them to other people, such as an investor, for profit. 

Skills a real estate developer should have

Some skills guarantee success in real estate, these are not born, which means they can be learned and developed.

The first one is leadership, to have the ability to motivate the participants in development to give their best. 

 

On the other hand, communication skills are required to provide instructions clearly and convincingly. Another skill is negotiation skills because the position includes negotiating with:

  • buyers
  • Sellers
  • investors
  • bankers
  • contractors
  • architects
  • governments
  • Suppliers 
  • Among others

In the same way, a real estate developer needs to have financial knowledge for the advice of contracts and terms of bank loans. You must also know about construction, architecture, and engineering.

Legal knowledge is required, as you will eventually be working with lawyers and establishing agreements. 

Other necessary skills are: 

  • Persistence: to face each challenge without losing sight of the objective.
  • Troubleshooting: Problems that arise will need to be resolved.
  • Wit: You must know how to approach each situation and make the best of it.
  • People Skills: What It Means to Have People Skills.
  • Creativity: This skill will help you to know how to best use a piece of land or how to reorient a building.
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So if you want to get into the real estate development business, you need to consider each of these skills, including the ability to make tough decisions based on facts and analysis. 

Stages of real estate development

To better understand the functions that we have already presented to you, we are going to introduce you to the stages of real estate development and the actions of a professional in this field :

Creation and feasibility of the project

The creation is its conceptualization, the legal and financial structuring of the project is established, a specific need is identified, the business opportunity, and the demographic growth trend of the area, among other variables.

Then a property or piece of land with the necessary characteristics for the project is sought, and a market study, risk analysis, development feasibility evaluation, and environmental studies are carried out. 

At this stage, the real estate developer must obtain permits by current legislation.

In the same way, the current status of the land, the deeds, land use, public property registry, its legal regime, real estate valuation, tax charges, urban planning, and applicable legal framework must be considered. 

During this second stage, it is also necessary to verify other aspects such as those related to trusts, certificates of real estate participation, and capital contributions, among others. 

Preparation of business plan

This must be developed after the two previous stages and not before. Because it is necessary to analyze and document all the information collected, only then can it be defined if the real estate development is feasible or not. 

See also  How to be a real estate agent

The business plan is made based on information collected in a SWOT analysis, also marketing, it is necessary to gather information on risks, contingencies, and opportunities, and the resources that are going to be used for real estate development must be defined. 

The scope and costs, as well as the utility and return on investment, are aspects that must be considered in the business plan

Acquisition, design, and execution

The acquisition or purchase of the property is one of the most important or transcendental stages for the real estate developer. 

It must be considered that the property is free of encumbrances, this stage also implies the deed, appraisal, and management of procedures. 

Then you have to carry out the entire architectural design project, coordinating the studies, permits, and documentation that government authorities require for the authorization of real estate development. 

Finally, the start-up is carried out, which is the construction or execution of the project. The work is materialized according to the design and everything is established. 

Conclusion

To the previous stages, we must add real estate marketing, commercialization, and administration, which is the last thing that is done.

However, this stage can be executed by an agency or company that evaluates and develops the marketing, public relations, and advertising strategy.

Real estate development can be an ambitious profession, but it is professionally and financially satisfying. 

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