Starting a property development company is a fast route to achieving great wealth and respect. Becoming a developer is all about finding and completing your first successful project. But how do you find and build your first project with no experience and without being wealthy first?Step 1: Understand “highest and best use”First, you need to understand the concept of “highest and best use”. The highest and best use for a property is the use that generates the most income for the owner while being physically possible and legally permitted. As a developer, you are looking for properties that are not at their highest and best use. Bringing them there is how you will make your money.Step 2: Select and study your target areaStart by selecting one area to focus on. For beginning developers, this is usually the area where they live. However, if you live in an area where real estate values are not going up, you may need to choose somewhere more dynamic. The important thing is to focus. Your knowledge of a particular area is one of the key advantages you have as a beginning developer. You can’t develop this expertise if you divide your time.Once you have selected your area, learn the locations of businesses, schools, parks and houses there. Notice how properties fit together, then look for properties that “stick out”. An example would be a small house on a large lot on a street with condominium buildings–there is probably an opportunity to replace the house with with a condo project.Step 3: Get control of your target propertyOnce you have found a property that “sticks out”, you need to control it. Fortunately, you don’t need to have much money to control property. Here’s what to do: Find a real estate agent in your area. Ask for his help in writing an offer for the property. Make sure to put in the contract an escrow period of at least 60 days. Once you have the owner’s signature on the sale contract, you control the deal.Step 4: Create your teamYou need help from experts to develop your project. Luckily for you, many of them are willing to work for free in the beginning. The most important team member is your architect. To find one, ask real estate agents for recommendations, then speak to anyone they recommend. Explain what you are trying to build, ask if it is possible, then listen carefully. The architects will be willing to tell you if the project is possible and what steps you need to take to make it happen. Select the architect you feel comfortable with and ask him to help you assemble financial projections for the project. These include the costs of buying the land, getting the necessary permits and plans, paying a contractor, and either selling or leasing the project once it’s done.Step 5: Find the moneyWith the property under control, an architect on the team, and solid financial projections, you are ready to raise money. Most of the money you need will be construction loans from banks. However, you will also need cash, sometimes called equity. This can come from you or from investors. You will need to bring equity totaling 10 to 20% of the cost of the project in order to convince banks to loan you the rest. It is very important that you speak with a good lawyer before soliciting anyone to invest in your project. Your lawyer will explain the relevant laws and create the legal documents you need. When you do speak to investors and banks, keep this in mind: It is your job to project an aura of confidence. Your ability to sell your project to the people with the money will determine if your project will happen or not.Remember: The completing your first project will be hard. You will sometimes feel like quitting. But great rewards do not go to quitters; they go to people who dream big dreams and have the courage to work hard to make them come true.
The spurt of business as well as industrial activities in and around major urban centres has led to a massive demand for residential, commercial, retail and office space as well as increase in prospective buyers for real estate developers in India. Even though the realty firms and their projects are barrelling full steam ahead, they are still hard pressed to meet the ever rising tide of demand for the various infrastructure needs of the modern Indian.Mumbai and Delhi have risen to the top of the property price ladder, and even though various estimates put one ahead of the other in terms of the property’s value, the general consensus is that they are the priciest cities in India today. Other cities are also fast catching up, as businesses are looking to forever expand their operations to other metro cities of India. Bangalore, Hyderabad, Chennai, Kolkata and Pune are close contenders in the race to attract investors, even though the risks and returns on such investments in these cities hinge on factors very different from one another. For example, the economic and political stability of one city might seem to be a safe bet, but the gestation period may be extended, while another city might promise a windfall return on investment, but are hugely influenced by policy changes. As an investor, it would be wise to research the various governmental and economic policies and choose the city of investment wisely.The reasons for the real estate boom are vast and varied, ranging from industrial and financial growth (the burgeoning of the IT and BPO services) to the respective state governments’ policies regarding investments in this sphere, as well as more and more affordable home loans being available to the public thanks to lower interest rates. Moreover, investments in residential and commercial spaces are relatively safe from minor to medium intensity economic turbulence, as opposed to stocks or mutual funds, and this is a major factor that draws in the working Indian professional looking to make a medium to long term investment.With all this growth in this market, realtors in India have struck a gold mine of opportunity. Shielded from most of the risks associated with huge market ventures, the major Indian cities have seen a flurry of construction over the past decade powered by the major realty developers in the country. A new construction project is completed somewhere in India every twelve hours by some estimates, and as such the property market in India valued at over USD 12 billion. The major real estate developers in India have their work cut out for them, and nobody is complaining. Tier 1 and 2 cities are awash with projects under construction, and their skyline is peppered by countless cranes erecting the monuments that, when completed, will become the symbols of the growing economic power of India.