Do you want to enter the exciting world of real estate development?
Then you’ll have to go through the steps of becoming a real estate developer.
And luckily, we’re here to walk you through all these steps.
In this complete guide, we’ll look at:
- What is a real estate developer
- How to become a real estate developer
- What skills do real estate developers need
- How much do real estate developers earn
- And more!
So are you ready?
Let’s begin!
What is a Real Estate Developer?
A real estate developer is responsible for planning, financing, marketing, and managing real estate development projects.
They oversee the entire development of a real estate property.
Here are some areas where real estate developers should excel:
- Real estate legal documents
- Financing
- Negotiation
- Real estate construction and development processes
- Construction laws – such as zoning, permits, and working with contractors
- Urban planning, home building, and project planning
Real estate developers also work with various stakeholders, including contractors, investors, homeowners, and real estate development companies.
As you can see, there’s a lot on their plates.
So it makes sense that there are several steps to becoming a real estate developer…
How to Become a Real Estate Developer – The 7 Steps to Success
To become a successful real estate developer, you have to complete these 7 steps:
- Earn a degree
- Get a real estate license
- Gain relevant experience
- Join a real estate development firm
- Build a network
- Work on several things
- Work independently
Let’s get into the details of each step.
Step 1: Earn a Degree
Okay, okay.
A degree is not required if you want to become a real estate developer.
HOWEVER…
Real estate developers need a lot of specific knowledge.
And you can obtain that knowledge with a college, Associate’s, Bachelor’s, or even Master’s degree.
You decide.
To help you out, here are some of the most relevant programs for real estate developers:
- Management
- Construction Management
- Business
- Engineering
- Finance or Accounting
- Real Estate Development (if you choose to get a Master’s degree)
Now, getting a degree will not only give you the necessary knowledge…
It will also help you easily find a job as a real estate developer. It will give you that competitive advantage.
A lot of real estate development companies only hire those with a Bachelor’s degree at most.
So though this step isn’t required — it’s still very, VERY important.
Step 2: Get a Real Estate License
In most states, you will need a real estate license to become a real estate developer.
So why not get one as early as now?
Even if it isn’t required, it’s still a good idea so you can gain experience.
To get your real estate license, you will have to complete your state’s requirements.
Generally, you will have to fulfill these requirements:
- Complete a real estate pre-licensing course that’s approved in the state (the course hours differ greatly per state).
- Pass a real estate exam specific to your state (you will need to register for it).
- Submit fingerprints and a criminal background check (this is only required for some states).
- Apply for your real estate license (the necessary documents and fees will depend on your state).
- Find a sponsoring broker (this is the company that you’ll be working for).
If you want the specifics, check out our chart here for the complete requirements for all 50 states.
Step 3: Gain Relevant Experience
One important step to becoming a successful real estate developer is to gain experience in the real estate industry.
You can choose to work as a real estate agent for several years.
This will already teach you the ins and outs of real estate properties.
Then you can move to internships or entry-level positions as a real estate developer assistant.
With this, you’ll get a taste of what it’s like to manage your own real estate development — the processes, the tasks, and much more.
And you don’t even need to just focus on real estate.
You can look for ways to gain experience in management or construction management…
Financing…
Engineering…
You name it.
Any relevant experience will help you reach the top.
Step 4: Join a Real Estate Development Firm
Now it’s time to apply to a real estate development firm as an actual real estate developer — not just an assistant.
With relevant education and experience under your belt, it’s easier to find a firm that’s willing to hire you.
So go search your local real estate development firms and apply with the ones that interest you.
It’s a good idea to go with a firm that will support you and help you acquire even more skills and knowledge.
And you can stop there.
I mean, you’re now a real estate developer.
But if you want even more success, then your goal should be to become an independent developer.
If so, do the following steps…
Step 5: Build a Network
If you want to become an independent real estate developer, you need a strong network.
You need to form connections with people that can help you with finding land, financing, locating clients, marketing, and much more.
Some professionals to include in your network are (to name a few):
- Civil engineers
- Designers
- Architects
- General contractors
- Surveyors
- Environmental engineers.
A close working relationship with these professionals will ensure your development project runs efficiently and smoothly.
Networking with experienced real estate professionals can provide valuable insights and advice as you navigate the industry.
But where do you find these people?
By attending real estate events…
Joining local real estate organizations…
Going to open houses…
Meeting professionals in the field…
Step 6: Work On Several Things
Before you can become an independent real estate developer, there are several things you need to work on.
These are:
- Your market
- Your strategic plan
- Your finances
- Your certification
Let’s look at these…
Understand Your Market
Knowing your potential clients and what they want in a property can help you create an appealing and profitable development project.
To make informed decisions, you need to have a deep understanding of the local market dynamics and demographics.
Research areas where you want to work.
From there, identify factors that drive demand for properties — such as population, economic development, growth, and infrastructure projects.
It also helps to look at the latest data on property prices and sales volumes. This gives you insights into market trends.
One effective way to collect this information is through online polls and surveys.
Speaking with experienced real estate professionals and existing customers can help you identify your target market’s preferences and needs.
Develop a Strategic Plan
A strategic plan should cover a range of key factors, including:
- Product line
- Sales strategy
- Marketing strategy
- Financial plans
- And more!
All this will help you stay on track.
It will help you make informed decisions, too.
For instance, you might want to decide whether you’re going to specialize in commercial or residential property development.
Or you might want to plan out how you are going to market yourself as a top real estate developer.
Here are some effective strategies to market your services:
- Social Media
- Traditional Advertising (e.g. newspaper, radio, and television ads)
- Word of Mouth
- Business Cards
- Networking
- Publicity
Most importantly, you will need to plan how and where you can secure financing for your projects.
Secure Financing
As a real estate developer, you must have a solid understanding of your financial needs and create a realistic financial plan for your project.
You will need to find potential sources of funding and choose the one that best suits your development project.
One option for financing is to seek out investors.
Investors may include private equity firms, friends and family, venture specialists, or other sources of capital.
Prepare a well-crafted business plan that outlines the scope of the project, potential risks and rewards, and how the investment will be used.
Another option is to secure a loan from a financial institution.
For this, you need to come up with a detailed financing plan and the potential profits.
This will help the bank assess the level of risk involved in lending money to finance your development.
Keep in mind that securing financing is not a one-time event.
You will need to maintain good working relationships with investors and financial institutions throughout your career.
Additionally, building a strong network of potential lenders and investors can help you secure the funding you need for future projects.
Get a Real Estate Developer Certification
If you want to gain even more knowledge about real estate development, then it’s a good idea to get a certification.
Having a certification will also make you look good to potential clients.
Yes, getting a certification means studying again.
Some even require you to have several years of experience, become a member of an organization, study several courses, take an exam, and pay a fee.
But it will be all worth it if you want to become an independent real estate developer.
Here are 2 real estate developer certifications you can consider:
- Accredited Land Consultant (ALC)
- Real Estate Development Certificate
Step 7: Work Independently
If you’ve diligently gone through Steps 5-6, you will be well-equipped as an independent real estate developer.
As an independent real estate developer, you will have the freedom to pursue your own projects, goals, and visions.
Not to mention, the potential for significant financial gains.
You will have the opportunity to create and execute your own business plans, which can lead to higher profits.
Of course, if you’re just starting, it will be a bit difficult to find potential clients.
You have to prove your worth to them.
Show them your experience.
Your development plans and projects.
Your certifications.
Once you’ve established your name, it will become easier from there.
So you need a lot of resilience, patience, and hard work.
Frequently Asked Questions About Real Estate Developers
What Does a Real Estate Developer Do?
Real estate developers have unique duties and responsibilities that involve turning raw land into functional and beautiful living, industrial, or working spaces.
They use their creativity and expertise to envision the best use of space.
From there, they work tirelessly to make their visions a reality.
Some other responsibilities may include:
- Purchasing land
- Assembling a team of professionals
- Zoning regulations with government officials
- Negotiating building permits
- Overseeing the construction of the property
- Selling or leasing the property
What Are the Skills Needed for Real Estate Developers?
Here are some skills that a real estate developer need:
- Financing
- Accounting
- Engineering
- Understanding contracts
- Strategic thinking
- Negotiating skills
- Project management
- Attention to detail
- Market knowledge
- Social and communication skills
- Adaptability
- Time management
- Leadership
- Marketing
How Much Do Real Estate Developers Earn?
According to ZipRecruiter, real estate developers earn an average salary of $84,748 a year in 2023. That means you earn around $41 an hour.
Of course, your salary will depend on several factors, such as:
- Your real estate development firm
- Development projects
- The state and city you work in
- Number of clients
Conclusion
And that is how to become a real estate developer.
If you choose to work with a real estate development firm, then you just need to follow Steps 1 to 4. This includes:
- Earn a degree
- Get a real estate license
- Gain relevant experience
- Join a real estate development firm
But if you want to become an independent real estate developer, then you need to follow Steps 5 to 7. This is:
- Build a strong network
- Work on several things — your market, strategic plans, financing, and certification
- Find a client and start working as an independent real estate developer
Of course, going independent will take a lot more time and effort.
You will need to work in a development firm for several years.
But it also gives you more freedom and higher earning potential.
So the decision is yours.
Good luck!