Many small companies, in addition to their main line of business, try their luck at real estate development in order to expand their profit potential. However, a venture in real estate development requires not only a good level of education and skill but also a certain level of luck. Successful real estate developers thus gain experience with a real estate development firm before setting out to develop real estate on their own.
Step 1
Acquire the education needed to become a real estate developer. Although many real estate developers today gained entry into the field without qualifications, most developers have acquired at least a bachelor's degree in finance, economics or real estate. You may have already acquired this education prior to starting your own small business.
Step 2
Gain the necessary experience for becoming a real estate developer. Real estate development requires a certain level of knowledge in finance, economics, valuation and business. Furthermore, real estate developers need to acquire a level of savvy in business. Such experience may be gained through a training program at a real estate development firm or an investment bank. Alternatively, you may hire someone with the necessary relevant experience.
Step 3
Build the necessary funds needed for a career as an independent real estate developer. These funds may be acquired through savings throughout your career or from your current small business. The specific amount of funds required obviously depends on what sort of real estate you wish to invest in but can range from hundreds of thousands to tens of millions of dollars. Most independent real estate developers thus start off small by developing family homes. You may supplement your own funds with some construction fund financing, which may be obtained from a bank.
Step 4
Obtain the necessary financing for a real estate development if you don't wish to finance the project yourself. Such financing may be combined with your own funds. Alternatively, you may fund the real estate project with the money of third-party investors. If so, you will only be taking in a small cut of the project's profits instead of the entire share. If you are considering this route, a good business network of investor contacts is essential.